The UK’s second-biggest mutual, which has snapped up several of its rivals during the turmoil of the last three years, has been granted a period of exclusivity by the board of N&P and its advisers within the last few days, Sky News reports.
The exclusive talks are designed to allow the Yorkshire to conduct more detailed due diligence on N&P’s books. An agreed deal is likely to be some weeks off.
If a merger can be completed, it would mean the Yorkshire will have seen off competition from rival bidders including Virgin Money, the financial services arm of Sir Richard Branson’s empire, and JC Flowers, the US private equity firm which recently took over Kent Reliance
It is not clear whether the Yorkshire would pledge as part of any deal to preserve jobs and the branches at N&P, as at least one rival suitor was prepared to do, according to reports.
N&P, which is the ninth-biggest building society, has nearly 500,000 members. However, it has been under pressure because of its financial exposure to the collapsed investment firm Keydata.
It has had its back against the wall since the FOS ordered it to compensate a customer exposed to Keydata products ealier this month, in a case victims say mimics hundreds of others.
The customer, who lost money in Keydata investments sold to them by the building society’s IFAs, was the first to have their complaint upheld in a final decision by the Ombudsman.
It is believed to be near-identical to about 500 complaints from other customers, and is set to expose N&P to up to £10m in compensation costs.
