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Friday, December 11, 1998 Published at 14:00 GMT

Business: The Company File

Midshires members vote for windfall

Children will gain from windfall payments for the first time

Members of the Birmingham Midshires have voted overwhelmingly to accept a £750m bid from Halifax, triggering windfall payments for one million borrowers and savers.

BBC's Business Breakfast reports on Birmingham Midshire vote
Savers who have held accounts for more than two years stand to gain around £1,250. Borrowers and more recent investors will receive Halifax preference shares worth £400. Customers will receive the windfalls in April, when the deal is due to be finalised.

Successful vote

Chief Executive Ian Kerr: We don't expect much changes for our customers
A ballot of the group's members found 95% of investors and more than 90% of borrowers in favour of the deal.

The vote is a ringing endorsement for the bid. To be successful, Birmingham Midshires needed three-quarters of investing members to vote in favour of the takeover, plus a majority of borrowers with the society.

"We are delighted members have chosen to back the transfer to Halifax, which will preserve the Birmingham Midshires brand identity in the High Street for at least three years and will allow the business to expand the range of products and services it can offer its customers," said Birmingham Midshires chief executive Ian Kerr.

Another one bites the dust

Birmingham Midshires is the latest in a long line of building societies that have chosen to give up their mutual status by either succumbing to a takeover bid or joining the UK stock market.

Birmingham Midshires members talk about the takeover
This dramatic consolidation of the UK's financial sector has led to billions of pounds of windfalls being handed out to tens of millions of customers.

Borrowers and savers are now putting pressure on remaining building societies to give up their mutual status.

The decision is a blow to pressure group Save Our Building Societies (SOBS), which has been campaigning for the deal to be rejected, fearing that many local Birmingham Midshires branches will be closed down.

The campaign, co-ordinated by Bob Goodall, has been supported by Liberal Democrat spokesman Vincent Cable and other MPs including Dennis Turner, Labour MP for Wolverhampton, Birmingham Midshires' home town.

Mr Cable said "Given the size of the windfall it not surprising members voted in favour.

"I think this is disappointing from the point of view of mutual ownership, but I do not think this is the end of the story.

"There is pressure to have a special meeting at which members can be offered a wider range of choices, rather than just yes or no to the Halifax," he added.

Higher price

Halifax plans to operate Birmingham Midshires as a separate division within its retail banking operation.

The announcement marks the close of a long-running saga since Birmingham Midshires announced last year that it was in takeover talks.

The building society agreed to the takeover from Halifax earlier this year after buying its way out of a previous takeover agreement with Royal Bank of Scotland, which had only offered £630m.

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