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Business News

Metro Bank shares surge after it confirms takeover approach by US private equity giant

today04/11/2021

Background
share close

Shares in Metro Bank have risen by nearly a third after it disclosed that it had received a takeover approach from US private equity giant Carlyle.

The lender confirmed, following reports by Bloomberg, that it had “engaged” with Carlyle in relation to the offer and that a further announcement “will be made as and when appropriate”.

Shares in the bank – which have fallen by more than half since the start of the pandemic – rose by 29% on Thursday’s announcement.

Metro Bank one-day share price chart 4/11/21
Image: Shares rose sharply on the disclosure

Metro Bank had been valued at just under £180m at the close of trading on Wednesday.

Carlyle’s offer is the latest deal put on the table in Britain’s banking sector after a takeover offer by the Co-operative Bank for rival TSB was recently rejected by TSB’s Spanish owner Sabadell.

Metro Bank has been battling to turn around its fortunes since a major accounting error in 2019 which forced out its top bosses and prompted a share price plunge.

It became the first new UK high street lender for more than a century when it opened its doors in 2010 and now has 78 branches and more than two million customer accounts.

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But like other mid-sized lenders, it has been struggling amid low interest rates.

Metro reported a loss of £139m for the first half of this year but that was narrower than the £241m loss a year earlier.

A TSB bank
Image: A recent offer for TSB was rejected by its Spanish offer Sabadell

Chief executive David Frumkin said at the time of this year’s half-year results that the financial performance reflected “where we are in our turnaround plan, as well as the impact of national lockdowns”.

In a third quarter trading update last month, Mr Frumkin said the bank was seeing “signs of a gradual return to normality” with total net loans of £12.3bn at roughly the same level as the second quarter though 18% down on the same period in 2020.

 Sky News

© Sky News 2021

Written by: Rother Radio News


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