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MPs aim to save Midshires from Halifax.

MPs have backed a campaign to stop Birmingham Midshires Building Society being swallowed by the Halifax for an estimated pounds 780million.

It is expected that the Halifax will announce the deal when it publishes its interim results on Thursday.

The Save our Building Societies Campaign (Sobs), which is backed by Mr Vincent Cable, Lib Dem MP for Twickenham, is now turning its attention to Birmingham Midshires, after successfully campaigning to keep the Nationwide a mutual building society.

Mr Cable said: "Sobs has developed formidable campaigning skills and we hope

to use them to save the Birmingham Midshires."

The Royal Bank of Scotland bid pounds 630million for Birmingham Midshires last year but this deal was eventually rejected as directors of Midshires, led by chief executive Mr Mike Jackson, held out for a higher bid as share prices in the financial servic es sector soared.

However, the prices have since tumbled, prompting some to suggest the Halifax would no longer offer such an attractive price. But the Halifax needs the deal after coming under heavy pressure from mutuals undercutting it on mortgages.

If the deal goes through it will be seen as a victory for Mr Jackson, who will leave once the Wolverhampton-based Midshires has converted to a bank.

If Birmingham Midshires members approve the deal, then they will each receive windfall payments of around pounds 1,000.

But Sobs has already started the campaign to persuade members not to accept the Halifax offer.

Mr Bob Goodall, co-ordinator of Sobs, said: "Mortgage customers at Birmingham Midshires will not be better off if this deal goes through. They may receive a windfall payment but will pay higher interest rates on their mortgages, because the Halifax is a bank that has to make profits for shareholders.

"Members of the Midshires must realise their society is worth at least pounds 1billion and should not be sold on the cheap."

Mr Goodall said other predators could be lined up to make an offer for the Birmingham Midshires which, as the fifth largest building society in the UK, has a healthy book of mortgage business.

"Before long we could have a feeding frenzy on our hands, which would not be beneficial to members," he said.

Lloyds TSB, the Bank of Ireland - currently linked with a move on the Portman Building Society - and the Prudential have all been suggested as possibles.

Birmingham Midshires spokesman, Mr Tony McGarahan, said: "We have not agreed anything with anyone yet."

But a Halifax spokesman reported: "Talks have been going well."

It is not known whether Halifax will offer the same guarantees to protect the 2,200 jobs at the Birmingham Midshires and keep branches open as did the Royal Bank of Scotland.
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Publication:The Birmingham Post (England)
Date:Jul 27, 1998
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