Beleaguered former building society Bradford & Bingley today revealed that its £400 million bailout rights issue was rejected by more than seven out of 10 shareholders.

The bank, which was today signing up Richard Pym as its chief executive, said its "third time lucky" share issue had been accepted by just

27.84% of shareholders.

Assuming that big four shareholders Standard Life, Legal & General, M&G and Barclays Global, which own just over 13% of the company and had agreed to subunderwrite the fund-raising, have taken up all their rights, other shareholders took less than 15%.

B&B's 850,000 small shareholders, who have mostly held their shares since demutualisation eight years ago, appear to have turned their backs on the issue.

Lead underwriters Citigroup and UBS now have an unusually long period of time - until close of business on Friday - to try to sell on the 597 million shares, worth £328 million, that have not been taken up by existing shareholders.

In effect they are gambling on the shares rising far enough above the 55p rights-issue price this week for them to offload the rump of the issue. The shares were today up 1¼p at 56p.

The underwriters' task has been made easier by the arrival today of Pym as chief executive. Until last year, he was chief executive of former building society Alliance & Leicester. He left before the credit crunch hit, but is credited with leaving the bank in a sound state that last month saw it receive a £1.3 billion takeover bid from Spain's Santander.

Pym will be paid a basic salary of £750,000 and receive a guaranteed cash bonus of £750,000 plus the same amount again in shares. He is also being granted £1.5 million of share options at today's price.

Investors in B&B, who have seen their shares fall by more than 70% this year alone, are optimistic he will be able to engineer a takeover of their bank.