Aldermore board backs £1.1bn takeover

Aldermore board backs £1.1bn takeover

Challenger bank Aldermore's board has agreed to be taken over by the South African bank First Rand.

As FTAdviser previously reported, Aldermore announced on 16 October that it was in discussions with First Rand about a takeover.

Aldermore is listed on the FTSE 250.

This morning (6 November) Aldermore confirmed to the stock exchange that it has agreed a deal, valuing the company at £3.13p per ordinary share.  

That price equates to 1.8 times the tangible book value of the bank.

That valuation contrasts with the valuations at which FTSE 100 banks Barclays and RBS trade, at less than one times the book value.

First Rand is funding the deal from existing cash resources.

Phillip Monks, chief executive of Aldermore, will continue to run the company.

Aldermore provided £2bn of mortgage loans in 2016, and its last reported profits were £133m, a 34 per cent increase.

It had 30,000 customers in the year in question.

AnaCap, a private equity firm with a focus on European financial services companies, said it supports the takeover.

AnaCap was an early investor in the business that evolved into Aldermore.

Aldermore shares have responded positively to the news this morning (6 November) and are up 2.4 per cent to £3.09p.