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[LONDON] British challenger bank Shawbrook Group Plc called on its shareholders to accept an increased and final £868 million (S$1.53 billion) offer from private equity groups, setting the stage for the buyers to take the lender private.
Marlin Bidco, the buyout vehicle set up by BC Partners and Pollen Street Partners, said on Monday it had received valid support for its offer from other Shawbrook shareholders owning a combined 75.6 per cent of the company, exceeding a key threshold.
Under the deal structure, the company would be de-listed if at least 75 per cent of its shareholders accept the offer, with those who did not accept becoming part owners of an unlisted entity.
Shawbrook said on Tuesday that it continued to believe that the offer from the groups, which already hold 38.8 per cent of the lender, undervalued the company.
However, the lender said its independent directors, who have been advised by Bank of America Merrill Lynch and Goldman Sachs, would accept the offer in terms of their own beneficial shareholding.
The offer would be open for acceptance until July 10.
The consortium first made a bid for Shawbrook in January, offering 307 pence per share, before raising its offer to 330 pence in March and to 340 pence this month. However, so far, Shawbrook's directors had advised shareholders to reject the offers.
Analysts at Investec recommended that Shawbrook shareholders recycle their profits into other UK challenger banks such as Virgin Money, Aldermore and OneSavings.
These challenger banks, which emerged since the financial crisis to fill a gap in small-business lending, have increasingly been seen as ripe for takeovers in recent months, bankers who advise on mergers and acquisitions have said, as a prolonged period of low interest rates has squeezed earnings, while the pound's fall has made them cheaper for foreign buyers.
"We believe that Marlin Bidco's final offer for Shawbrook of 340p, equivalent to 9.5x 2017 EPS estimate, serves to illustrate the scale of undervalued opportunities elsewhere within the "challenger bank" space," the analysts said.