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.

But the move has been rebuffed by the Chelsea, which dismissed the offer as "absurd" and poured scorn on Totalise's credentials.

Former GP Mr Gregory 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.

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 traditional building societies such as Chelsea and the Skipton to force them to demutualise.

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.

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