A Skipton businessman has made an audacious bid to merge with Britain's eighth largest building society.

Peter Gregory approached the Chelsea Building Society with a proposal to merge with his new venture, the Totalise internet company.

The proposal was rebuffed by the Chelsea, which dismissed the offer as "absurd" and poured scorn on Totalise's credentials.

Mr Gregory, a former GP, started medical recruitment agency Medacs in Skipton before selling the business for £12 million. He launched Totalise in July last year.

Totalise offered to act "as a junior member but to add internet banking experience and facilities to the Chelsea, enhancing the value of both operations".

A spokesman said that in rejecting the offer, the Chelsea had acted hastily, had not considered the details and recognised the potential.

A press release from the Chelsea rejecting the bid said that Totalise had made a loss of £922,000 in seven months on a turnover of just £61,000 while the Chelsea made a profit of £38.9 million on turnover of £966 million.

It said the Chelsea strategy was focused on mortgages and savings while Totalise was an internet service provider, flower retailer, car importer and a would-be bank.

"The idea that a tiny, loss-making internet service provider with no obvious track record in financial services should merge with the Chelsea is absurd," said Michael Bage, chief executive officer of the Chelsea.

"There is nothing compatible between our organisations in terms of business focus, financial strength or management expertise.

"There is nothing sound about Totalise's approach to Chelsea, it is quite simply blatant opportunism."

A Totalise spokesman said the building society was using old figures and the firm had since taken £7 million in orders for cars imported from the Continent.

It emerged that Totalise has taken over a website devoted to "carpetbaggers", who have launched an assault on the traditional building societies such as Chelsea and the Skipton to force them to demutualise.

Set up to coordinate efforts of those who wish to see building societies lose their mutual status and provide a "one-off" windfall payment to members, its efforts are being firmly resisted by the Chelsea and the Skipton.

A spokesman for Totalise said that the acquisition of the carpetbaggers web site was a "partnership" and declined to comment on financial details.

He added that there were no immediate plans for Mr Gregory to make a similar offer to his hometown building society as Totalise was focusing on the Chelsea.

The Skipton holds an annual meeting on April 26 at which members will be asked to vote on a resolution put forward by carpetbaggers which calls on the Skipton directors to consider converting from a mutual society into a bank.

Skipton directors have asked members to support the resolution, a tactic designed to leave the decision in their hands.

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