London, United Kingdom - Addleshaw Goddard LLP (AG) is advising the UK's second largest building society, Coventry Building Society (CBS or the Society), on its potential £780 million cash acquisition of The Co-operative Bank Holdings p.l.c. (including The Co-operative Bank p.l.c. (Bank)) (Bank Holdings) (the Acquisition).

In a joint statement made on 24 May 2024, the Boards of CBS and Bank Holdings announced that CBS and the major owners of Bank Holdings, collectively holding approximately 88% of the A shares and 100% of the B shares in Bank Holdings, have signed a share purchase agreement (SPA) under which the Society will acquire the entire issued share capital of Bank Holdings. Bank Holdings’ shareholders will, in accordance with Bank Holdings' Articles of Association and the terms of the SPA, be entitled to receive a total cash consideration of £780 million (subject to customary post-completion price adjustments and the terms of the SPA). Of the total cash consideration, up to £125 million will be deferred for a period of 3 years from completion subject to the future performance of the Bank and the terms of the SPA.

Subject to the satisfaction of certain conditions, including regulatory approval from both the PRA and FCA, the Acquisition is expected to complete in the first quarter of 2025.

A combination between the Society and the Bank is expected to both deepen and enlarge the CBS group's existing presence in mortgages and savings and extend the Society's propositions.

The Acquisition would create a combined group with a pro forma balance sheet of £89 billion as at 31 December 2023, allowing the Society to leverage its financial scale and a diversified funding base to continue to offer strong member value and enhance investment to continue to deliver outstanding service across branches, online, telephone and mobile services.

The Acquisition would also provide CBS with an established position in the personal current account market, broaden the Society's channels and distribution capabilities, including an enlarged national footprint, and introduce a business savings and current account proposition into the Society's offering.

CBS would seek to integrate the Bank gradually over several years, prioritising good customer outcomes, following the completion of detailed planning and engagement with relevant stakeholders.

Ben Koehne, Co-Head of Financial Services and Head of AG's market leading Building Societies and Mutuals practice said:

The Addleshaw Goddard team advising CBS is being led by Corporate M&A Partners Ben Koehne, Oliver Broomfield and Hardeep Plahe and a core team including Corporate Managing Associates Victor Oderinde, Faye Wiles and Jack Edwards and Associates Jemima Clarke and Jagpal Pahal.

The wider cross disciplinary team includes, amongst others, James Greig, Rosanna Bryant, Sophie Skelton, David Pygott, Sandip Singh, Noel Power and Nikesh Shah (Financial Regulation), Damon Rosamond-Lanzetta, William James, Andana Streng and Alex Torpey (Commercial), Francesca Sepulveda (Finance), Rachel Kelly, Kerry Pettigrew and Paul Denham (Structured Finance and Securitisation), Richard Yeomans, Helen Musi and Natalie McManus (Employment), Jonathan Fletcher Rogers (Incentives), Jade Murray and James Pickering (Pensions), Paul Concannon, Chris Fox and Adam Kobeissi (Tax), and Al Mangan and Sarah Persky (Competition).