Buyout firms swoop to buy hedge fund’s stake in Co-operative Bank

The private equity group which led the demutualisation of one of Britain’s biggest building societies is close to buying a stake in the Co-operative Bank in the most significant shake-up of its ownership since it was rescued in 2017.

Sky News has learnt that JC Flowers and Bain Capital Credit are in advanced talks to acquire the roughly 10% shareholding in the embattled lender held by BlueMountain Capital, a US-based hedge fund.

The price that JC Flowers and Bain Capital Credit have agreed to pay for the stake was unclear on Thursday, and one person close to the situation cautioned that the deal had yet to be signed.

It nevertheless heralds a potentially important moment for the ownership of the self-styled “ethical lender”, which has endured a torrid decade during which it twice had to be bailed out from the brink of collapse.

JC Flowers is one of the most prominent private equity investors globally in banking and financial services, with notable UK deals including providing capital to enable the demutualisation and stabilisation of the Kent Reliance Building Society after the 2008 crash.

Banking sources said the alliance formed between the two firms to buy BlueMountain’s stake in the Co-operative Bank suggested that they were unlikely to be passive investors in the company

Source: Sky News