Flowers in talks for UK building society

Having bid for Northern Rock two years ago, the New York-based firm has reportedly tabled a £50m bid for mutual lender Kent Reliance.

UK building society Kent Reliance Building Society (KRBS) has confirmed in a stock exchange statement that it is in talks with private equity firm JC Flowers. Additional details were not disclosed.

JC Flowers is putting forward a £50 million bid to own a 49 percent stake, while the building society’s 180,000 members will retain a controlling stake, according to the Financial Times.

If a deal materialises, it would be the first time a private equity firm has invested in a building society, which is different to a bank in that it is run by its members. This is not the first time JC flowers has attempted to acquire a mutual lender, having tried to acquire Northern Rock in 2007 in an unsuccessful and highly-publicised bid.

A number of news outlets have reported that the bid is part of a plan to consolidate further building societies with £500 million being contributed by the firm in a radical overhaul of the sector. Former Financial Services Authority head Sir Callum McCarthy will reportedly lead the venture.

Founded in 2001 by former Goldman Sachs partner J Christopher Flowers, JC Flowers primarily invests in financial services. It owns a 32.6 percent stake in Japanese Shinsei Bank (formerly Long Term Credit Bank of Japan) as well as a 24 percent stake in German former state-run bank HSH Nordbank.

Kent Reliance building Society was formed in 1847 and its total assets stand at $2.2 billion.