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The Co-Operative Bank has agreed to enter further discussions with “several” parties interested in making a takeover offer, it said today, a day after its former parent group effectively declared it worthless by taking a writedown for its entire value.
The bank reported last month that a number of potential suitors had expressed interest in an offer, and today it said several have since made non-binding proposals. The bank’s board has agreed to enter further discussions while continuing to discuss other options to build capital, it said.
It said the Prudential Regulation Authority “has welcomed the actions being taken”, though it added that there can be no certainty of any final moves.
Co-op Bank has struggled since 2013, when bad loans created a £1.5bn capital hole in its books. The bank was taken over by bondholders, with the Co-op Group retaining 20 per cent, but they have struggled to revive its fortunes, and it put itself up for sale in February.
However, the announcement raised questions over who would be able to purchase the bank, which still faces significant headwinds and has warned that it is unlikely to turn a profit until 2018.
Co-op Bank said it had received proposals from “strategic and financial parties”, with each of the preliminary offers including “some form of liability management exercise” of its outstanding public debt.