Coventry Building Society has tentatively offered £780m to buy the Co-operative Bank from its hedge fund owners, in what could be the latest in a string of takeovers among UK lenders.

The offer follows nearly four months of exclusive talks between the two lenders, which began in December. If a deal is completed, it would create a new high street challenger with almost 5 million customers and an £89bn balance sheet

However, there are likely to be weeks of negotiation ahead before a deal can be finalised and both groups have stressed that there was still “no certainty at this stage” that a takeover would take place.

The “non-binding” offer signals that enough due diligence has been done over the last three months to convince the management of Coventry, and the Co-operative Bank’s hedge fund owners, that a deal could be in their best interests.

“We have a very successful history, and we believe this could be the basis of a very successful future – with membership, great value and great service at its heart,” Coventry Building Society’s chief executive, Steve Hughes, said.

Source: Theguardian