Two directors of Leopold Joseph, the bank set to be bought out by Bank of N.T. Butterfield & Sons are to get ?15 million ($27.7 million) as part of the deal, according to a report in the UK paper The Times.

Bermuda?s oldest bank reported yesterday it had put in a bid for $94.5 million (?51.5 million) for the bank, which is said to be the private bank used by the Rolling Stones and Cat Stevens.

The Times article said that the bid will also see all of the London bank?s employees from boardroom executive to secretary benefit from a cash windfall.

The all-cash offer has been agreed by shareholders who control 74 per cent of the bank, and values the shares at ?9.50 each, an 11 percent premium to the bank?s closing price on Wednesday.

Robin Herbert, the 69-year-old chairman who bought the bank from descendants of Leopold Joseph during the 1960s will make about ?10 million ($18.5 million) for his 20 percent stake in the bank. Emanuel Davidson, a non-executive director and the founder of Asda Property Holdings, will make ?5 million ($9 million) in the deal.

The small private London bank was put up for sale last September after the board said that it could not compete with the increasing number of private banks that are owned by big financial institutions. Profits at the bank, which listed on the London Stock Exchange in 1971, dropped from ?2.8 million to ?2.3 million for the year to March 2003, and there have been no signs of recovery since.

Mr Herbert said in an official release: ?The board believes that this will be a good overall outcome for Leopold Joseph?s clients and employees. Leopold Joseph and Butterfield (UK) share important values, being strongly relationship-driven and committed to a high level of personal service for clients.?

Bank of Butterfield said yesterday that Leopold Joseph was a good fit for its UK private client business.

The deal, if approved, will not only bring in 3,500 clients and 120 staff, but will also make Bank of Butterfield a direct competitor of the Queen?s bank, Coutts and Co. and will give the Bermuda bank plush offices in the City of London, the financial district in London.

The London bank, which also has offices in Guernsey, was put up for sale in September, and a rigorous bidding and auction process with more than 30 companies after the prize, Bank of Butterfield won out.