TPG says 'no' to B&B rescue

Filed under: Private equityWhile there were challenges, it looked like Texas Pacific Group would snag a 23% equity stake in Bradford & Bingley PLC, a UK mortgage company. True, the deal was highly dilutive, but at the same time, B&B has been suffering from the credit crunch. Now, TPG has walked away and instead, a syndicate of investors has rounded up $793 million to bolster B&B. Apparently, the company will need to raise even more capital. Why? Basically, Moody's Investors Service downgraded the debt of B&B because of rising mortgage delinquencies and continued balance sheet problems. As a result, the economics of the deal changed significantly. In fact, TPG had negotiated an "out" clause for such a scenario. Actually, the deal implosion points to the fact that the credit crunch is global. It even appears that things may be... [read full story]