A group of private equity firms have tabled a formal offer for Shawbrook despite the specialist lender rejecting the £842m bid earlier this month, sending shares in the challenger bank up by 10 per cent.
Pollen Street Capital and BC Partners have announced a formal bid for the bank of 332.7p per share – comprising a 330p cash offer and the 2.7p dividend in respect of last year.
Although the price is the same as the offer rejected a few weeks ago, the formal bid announced on Friday has been structured with the aim of giving investors more flexibility as to whether they sell or remain invested.
The deal requires only 50 per cent of shareholders to accept the offer, although it will remain listed if fewer than 75 per cent agree to the bid.
Pollen Street Capital holds just under 40 per cent of the bank. The private equity companies have also received a letter of intent from other shareholders representing a further 6 per cent.
Gary Greenwood, an analyst at Shore Capital, said even if it remains a listed entity, “obviously this leaves others as minority shareholders….dancing to their tune.”
The private equity firms said key to their plan is to have “two committed long term shareholders with a four to six-year investment horizon”.
Previous offers have been rejected by some institutional investors who believe the price is not high enough. The 332.7p represents a premium of nearly a third on the average share price of 251p over the past six months.
Shawbrook’s share price has been volatile over the past eighteen months, dropping to 132 pence last July.
The bank made a surprise announcement in the summer that it had taken a £9m charge from bad loans after it discovered some lending at its asset finance arm did not meet its lending criteria.
Lindsey McMurray, managing partner at Pollen Street Capital, said:
We believe that the offer will provide liquidity to those investors that seek it and create an ownership structure comprising long-term, supportive investors that will allow the company to adopt a more flexible approach to changing market dynamics.