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Shawbrook urges shareholders to 'take no action' after takeover offer rebuffed

Challenger bank Shawbrook has urged shareholders to "take no action" and hold fire after bosses rebuffed an £825 million private equity takeover offer.

The lender said its independent directors were unable to recommend the offer tabled at the end of March by private equity firms Pollen Street Capital and BC Partners.

In a circular sent out to investors, it said "shareholders should take no action in relation to the offer and should not sign any document sent by (private equity consortium) Marlin Bidco or its advisers".

The suitors made an approach through Marlin Bidco to buy the lender for 307p a share in January, before upping its offer to 330p a share in cash.

Pollen Street is Shawbrook's biggest shareholder, owning just under 39% of the lender.

Shawbrook, which specialises in lending to small and medium-sized businesses, warned in the investor circular over "significant" costs of the bid, at around £4 million if it is aborted and up to £12.5 million if it succeeds.

The group also updated on first quarter trading, saying that loans rose 3% to more than £4.2 billion.

But its buy-to-let lending fell 12% after figures from a year earlier were boosted by the rush to complete ahead of stamp duty rises.

Steve Pateman, chief executive of Shawbrook, said the first quarter performance "reflects the resilience inherent in our diverse business" in spite of the "significant contraction" in the buy-to-let market.

He added the group is set to deliver "significant value for our shareholders over and above that implied in the current offer from Marlin Bidco".

The takeover approach comes after Pollen Street Capital 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.

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