Co-op To Lose Majority Stake In Bank In Hedge Fund Deal

Oct 22 2013 | 10:39am ET

Two hedge funds have forced the U.K.'s troubled Co-operative Group to give up control of its banking business.

Aurelius Capital Management and Silver Point Capital, major creditors of the Co-op Bank, have agreed to double their cash infusion into the bank to £1 billion, but their price is a steep one. Co-op will see its stake in the bank drop to 30% when it is listed later this year; the firm had hoped to retain 75% of the bank.

Co-op is seeking to avoid nationalization through the deal with the hedge funds.

"This is the first bank to be rescued and to survive as a standalone entity without taxpayer money," CEO Euan Sutherland said. But the circumstances of that survival has many worried, including labor leader Dominic Hook.

"This is dreadful for the staff, customers and the wider banking industry," the Unite union's national officer said. "This may mean customers will have even less choice on the high street and means we will have yet another finance company seeking shareholder returns over better banking."

Co-op, which was founded in 1844, is currently customer-owned.


In Depth

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Rolling Art Advisors Marketing Collectible Car Fund As Uncorrelated Alternative

Aug 27 2015 | 6:47pm ET

A new fund is trying to provide investors with greater access to an emerging asset...

Guest Contributor

FATCA for Hedge Funds: Eight Common Pitfalls

Sep 1 2015 | 10:56am ET

FATCA is now a way of life for those in the financial industry and most professionals...

 

Editor's Note