Shawbrook Urges Investors To Snub 'Undervalued' Takeover Offer

Shawbrook Urges Investors To Snub 'Undervalued' Takeover Offer
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Challenger bank Shawbrook has urged investors to ignore a final takeover offer from a pair of private equity suitors, saying the proposal "undervalues" the firm.

The lender has responded after Pollen Street Capital and BC Partners upped their approach through the bidding vehicle Marlin Bidco to £868 million, or 340p a share, on Monday.

It comes after the pair tabled an £825 million offer in March at 330p a share.

Investors now have until June 19 to decide whether to accept or reject the latest offer.

In a statement, Shawbrook said: "The independent directors have considered the terms of the final offer with their advisers and have taken into account feedback received from shareholders.

"The independent directors believe that the final offer undervalues Shawbrook and its prospects and therefore advise that shareholders take no action with regards to the final offer."

Shawbrook, which specialises in lending to small and medium-sized businesses, warned earlier this year in an 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 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.

On Monday, Lindsey McMurray of Pollen Street Capital and Cedric Dubourdieu of BC Partners said the final offer gave shareholders an "attractive premium and compelling value".

"We continue to share the Shawbrook management team's vision and look forward to working with them in the future to build on the company's strong foundations as a specialist lender," they said.

Shawbrook employs 600 people in 10 offices across the UK.