Shawbrook no quarter

7 March 2017 By Dominic Elliott

UK lender Shawbrook has spurned an 827 mln pound bid from two buyout firms offering a decent premium. That’s fine if it hits targets set last May that pledged healthy growth and high returns. But it places a lot of faith in Britain’s economy after it leaves the European Union.

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Shawbrook on March 7 rejected a bid from two private equity firms as the UK bank posted an 11 percent rise in full-year earnings to 64.8 million pounds ($79 million).

The board of the lender, one of the UK's so-called challenger banks, said it would not recommend a revised proposal from buyout firms Pollen Street Capital and BC Partners worth 330 pence a share, and remained confident in Shawbrook's strategy.

Pollen Street and BC Partners expressed surprised that their offer, which was improved from a previous bid worth 307 pence a share, had been rejected by Shawbrook's board. The private equity firms said Shawbrook had "confirmed it was comfortable with this revised offer".

The offer represents a 35.2 percent premium to Shawbrook's six-month volume-weighted average closing price to March 2, the private equity firms said.

Shawbrook reported a 19 percent return on tangible equity for 2016.

By 1002 GMT, shares in Shawbrook were trading at 316.5 pence, down 1.3 percent from the previous day's close.

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