Challenger bank Shawbrook is calling on shareholders to hold fire as it looks to stop a takeover bid from two private equity firms.
In March, Shawbrook rejected a takeover offer from Pollen Street Capital and BC Partners because it wanted to stay listed on the London Stock Exchange.
In a note published today (2 May), the directors of Shawbrook unanimously recommended that its shareholders “take no action in relation to the offer”.
They also advised shareholders not to sign any document sent by Marlin Bidco, which is the company jointly owned by the two private equity companies.
The challenger bank warned that the bid could lead to significant one-off costs, amounting to as much as £12.5m if the bid is successful, and £4m if the bid is aborted or unsuccessful.
Shawbrook also released its results for the three months ending 31 March, posting a 3 per cent jump in loans to reach £4.2bn in the quarter.
Its net interest margin remained at 5.5 per cent, despite significant pricing pressures and a higher level of back book redemptions, which reflects the high levels of market liquidity.
Steve Pateman, chief executive of Shawbrook, said the firm continues to trade in line with expectations.
“Our Q1 2017 performance reflects the resilience inherent in our diverse business-we can continue to grow within our risk and return disciplines, notwithstanding a significant contraction in flows in the buy-to-let market.”
Mr Pateman said market risk and return dynamics are competitive, but was confident that Shawbrook could continue to grow prudently and generate value for shareholders over and above that implied in the current offer from Marlin Bidco.
The bank said it had received more than 75 enquiries about its new interest-only mortgage which targets those aged 55 and older.
Shawbrook has also recently extended its business finance presence both in the UK and in Jersey, and has extended its network of consumer relationships with the addition of Confused.com.
katherine.denham@ft.com
