Kent Reliance confirms talks with?buyout firm JC Flowers
KENT Reliance Building Society confirmed yesterday it was in talks with US private equity firm JC Flowers on creating a joint venture to bolster its balance sheet while remaining a mutual organisation.
Kent Reliance said the new structure would allow for substantial new capital investment to support the 150-year old building society, which is owned by its members. Sources on Sunday said that JC Flowers, which previously tried to buy the UK’s stricken bank Northern Rock, would combine a £50m investment with the assets of the British building society in a new vehicle.
The building society would retain control with a 51 per cent stake, sources familiar with the matter said on Sunday.
Kent Reliance, which is the only building society based in the south-east England county of the same name, made a pre-tax profit of £2.3m in 2009 and had assets of £2.3bn at year-end.
JC?Flowers plans to use the Kent Reliance joint venture as a starting point from which to target other regional building societies which can no longer maintain the capital ratios required of them by the Financial?Services Authority purely from retained profit. The US firm is a veteran investor in distressed assets.