B&B shares soar as Texas Pacific defends strategy

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The claim comes after Clive Cowdery's Resolution, which created and sold a £5 billion insurance business, said it had come up with a rival scheme to inject £400 million into B&B that had the backing of four major shareholders.

B&B shares surged 7p to 73p as analysts said the Resolution approach highlighted the attractions of the bank, which has specialised in buy-to-let mortgages to other potential bidders.

But B&B's acting executive chairman Rod Kent turned down Cowdery's specific offer, which would have seen Resolution take a 49% stake in the former building society.

Cowdery is now expected to come back with alternative ideas, including ones which allow existing shareholders to have an equal share in his plan.

But TPG today warned those same shareholders that they have only until 7 July to back its cash injection and the accompanying £258 million rights issue.

"We have nothing more we need to do," said a source close to TPG. "No due diligence. The cash is ready to come in. Shareholders can be certain with us rather than suffer the uncertainty of Cowdery's vague proposals."

He also criticised Cowdery's lack of banking experience: "He's only been involved in insurance and only done insurance deals. That's very different to banking deals. We, by contrast have done hundreds of deals and own many banks."

TPG said that it had always envisaged its stake in B&B as the start of a much larger consolidation.

"We have a very precise plan. There are some very interesting opportunities out there at the moment."

He refused to identify potential targets but TPG has a record of buying mortgage businesses, so the likes of Alliance & Leicester and Paragon would seem viable, as would a bid for Northern Rock once the Government decides to denationalise it.

TPG also said it would not look at splitting the current cut-price rights issue and its own stake-buying at B&B, nor would it redraw the terms of its share stake to allow existing shareholders to clawback their rights.