B&B investors want books opened for Resolution

Investors in Bradford & Bingley stepped up demands yesterday to force the
bank’s management to open its books and let Clive Cowdery carry out due

Resolution, Cowdery’s company, is proposing an alternative plan to B&B’s
rights issue and £179m investment from TPG, a US private equity group.

However the bank’s management is resisting growing pressure to allow the
financial entrepreneur access to the confidential information.

Companies are under no obligation to open their books for the purpose of due
diligence. However ‘there is a rule that if you provide information to a bidder
then you have to provide the same information to others,’ says John Cole,
partner at Ernst & Young.

But it is ultimately up to management to decide if it is in the best
interests of a company and its shareholders to allow access for due diligence.

‘It’s a balanced call by directors as to whether it enhances shareholder
value,’ added Cole.

Cowdery has proposed to replace the £258m rights issue and TPG investment
with an injection of £400m in exchange for a 23% stake in the company, the FT

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