The Co-operative Bank will this week move a step closer to regaining its mutual status when it announces that it has struck a £780m deal to be bought by the Coventry Building Society.
Sky News has learnt that the two organisations are expected to announce as early as Thursday morning that they have reached agreement on the terms of a transaction.
Insiders said the cash price to be paid by the Coventry would be close to £800m.
Their statement will mean that a combination of the two financial services businesses is increasingly probable, more than a decade after the Co-operative Bank first came close to collapse.
The Coventry is preparing to hold its annual meeting next week, when it could face questions about whether it will allow its roughly 2m members to vote on the deal.
City sources said the building society – Britain’s third-largest – was not keen to offer its members a vote because of the impact it would have on the takeover’s timetable and the potential uncertainty it would create.
The issue has been highlighted by Nationwide’s decision to refuse its 17m members a say on its proposed £3bn acquisition of Virgin Money.
The Co-operative Bank and Coventry have been in exclusive talks for more than three months, with a range of issues still to be ironed out.
If completed, the deal will effectively remutualise the Co-operative Bank and create a financial services powerhouse with sclose to £90bn in assets.
By coincidence, the combined Coventry and Co-operative Bank would be comparable in size to a standalone Virgin Money, with about 5m customers across Britain.
Combining the organisations would give the Coventry a major boost in the personal current account and business banking markets.
