Shawbrook board agrees to takeover by private equity consortium
Challenger bank Shawbrook has grudgingly agreed to be taken over by a consortium of private equity groups after a prolonged battle that began in January.
Marlin Bidco, the buyout vehicle set up by Pollen Street Capital and BC Partners, announced on Monday that it had received support from 75.6% of Shawbrook shareholders for the £868 million bid.
That is well above the 50% threshold that was required to gain approval.
Shawbrook said it continues to believe this offer, at 340p per share, "undervalues" the company and its future prospects.
However, the group said that its independent directors, who are being advised by Bank of America Merrill Lynch and Goldman Sachs, would now accept the offer from the consortium and called on remaining investors to do the same.
Explaining the decision, Shawbrook said: "Marlin Bidco will have obtained a very significant level of control of Shawbrook.
"This level of control will enable Marlin Bidco to implement its stated intention to procure that Shawbrook applies to the UK Listing Authority for the cancellation of its listing.
"Consequently, it is likely that Shawbrook shareholders who do not accept the final offer could, as a result, own a minority interest in an unlisted company."
Pollen Street Capital itself owns a 38.8% stake and the offer paves the way for the buyers to take the lender private.
The bank had previously urged investors to rebuff the overtures from Pollen Street and BC Partners, arguing it undervalued the firm.
Shawbrook, which specialises in lending to small and medium-sized businesses, also warned earlier this year over "significant" costs of the bid, at around £4 million if it is aborted and up to £12.5 million if it succeeds.
The takeover approach comes after Pollen Street floated Shawbrook on the London Stock Exchange at 290p a share in April 2015, valuing the bank at £725 million.
Shawbrook employs 600 people in 10 offices across the UK.
Gary Greenwood, analyst at Shore Capital Markets, said: "Given the level of acceptances to date is likely to see the company de-list, we expect a high proportion of remaining shareholders will now also accept.
"As a result, barring the formalities, the takeover is effectively a done deal."