Portman Building Society - Merger

Merger

On 12 September 2006, the society announced plans to merge with the Nationwide Building Society, creating a mutual body with assets of more than £150 billion.

A protest group against the merger was created, citing loss of jobs, customer service and members' interests as reasons that the merger should not go ahead. The campaign attracted significant media attention. Bournemouth Counciller Ron Whittaker, himself a Portman account holder, appealled to Portman members to vote against the merger and "not to be taken in by handouts", in reference to the windfall offered. Financial observers questioned the benefits of a merger (describing it as more akin to a takeover) citing issues such as job losses, less competitive rates and lower service standards as disadvantages.

Just months prior to the announcement of merger plans, Portman executive directors had argued that the interests of Portman members would be best served by it remaining an independent mutual building society. As part of the merger tender presented by Nationwide, Portman executive directors were offered the incentive of higher paid jobs on the board of the Nationwide should the planned merger take place. Portman executive directors had further personal interest in the merger being approved as a large portion of their bonuses were dependant on the merger being completed, a fact that was omitted from the merger booklet provided to Portman members and not disclosed until after the merger votes had been submitted. Merger information presented to voters suggested that they should vote in favour of the proposed merger, advice in direct contrast to that expressed by the same Portman board before they had received Nationwide's incentive-laden offer.

The merger was overwhelmingly endorsed by members at the society's AGM on 23 April 2007. After the Financial Services Authority (FSA) endorsed the members' decision on 26 July 2007, the society became part of the Nationwide on 28 August 2007. After successfully convincing Portman members to vote in favour of the proposed merger, Portman Chief Executive Robert Sharpe received a golden handshake of £1.7m and a pension worth £152,000 per year, in addition to the salary received from his new position as Chief Executive of West Bromwich Building Society. As a direct result of the merger approximately 900 people lost their jobs.