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Coventry Building Society offers 780 mln stg in cash

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Coventry says its members not invited to vote on deal

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Planned tie-up follows Nationwide-Virgin Money UK deal

(Adds details, background)

By Eva Mathews and Sinead Cruise

LONDON, April 18 (Reuters) - Coventry Building Society

has offered to buy Britain's Co-operative Bank for 780 million

pounds ($971 million) in cash, in the latest attempted tie-up

among UK lenders jostling for market share amid fickle demand

for loans.

Talks on terms of the deal are advanced, the companies said

on Thursday, adding they are working on a definitive agreement.

The deal would create a group with a pro-forma balance sheet

of 89 billion pounds as at Dec. 31, the companies said.

Co-op Bank, which lends to consumers and small- and

medium-sized businesses, said late last year it was in exclusive

talks with Coventry Building Society about a possible merger,

following a number of non-binding offers from potential bidders.

A deal between the mid-sized players would likely restore

Co-Op's mutually owned status and quash concerns about its

future after it was carved out of the Co-operative Group in

2017.

A year ago, Reuters exclusively reported that Co-op Bank had

tasked PJT Partners ( PJT ) and Fenchurch Advisory to devise ways to

create value for its owners, a consortium of hedge funds

including GoldenTree Asset Management, JC Flowers & Co and Bain

Capital. News of exclusive merger talks with Coventry Building

Society followed in December.

Building societies like Coventry are mutually owned by

members rather than shareholders, and those members typically

have different benefits and ownership rights than stockholders.

On Thursday, Coventry said its members would not be invited

to vote on the proposed tie-up, echoing a decision by larger

rival Nationwide on another deal.

Last month, the boards of Nationwide and Virgin Money UK ( CYBBF )

said they had agreed terms on a 2.9 billion pound deal

that would create Britain's second largest provider of mortgage

and savings products.

Coventry is due to hold its annual meeting later this month

where talks on whether members should be entitled to vote on the

proposed merger with Co-Op Bank are expected to take place.

($1 = 0.8013 pounds)