Shawbrook facing £4m bill to fend off investor’s bid

FENDING off a bid from its biggest shareholder will cost Shawbrook £4 million, the challenger bank said today.

Responding to a 330p-a-share offer from Pollen Street and BC Partners, the lender said it is “not able to recommend the offer”.

Pollen owns 38.8% of the company as the original private-equity backer.

Shawbrook shares were today steady at 339p, which values the company at nearly £850 million.

Shawbrook says the £4 million is what it will pay advisers from Goldman Sachs, Bank of America and Slaughter and May to fend off the deal.

That amount could rise to £12.5 million if the deal does go through.

Since Pollen Street only needs 50% approval from shareholders to land its target, it seems likely that it will be able to force the offer through. In a trading update, Shawbrook said loans were up 3% in the first quarter to £4.2 billion.

Its net interest margin (NIM), the gap between what it charges borrowers and pays savers, is at 5.5%.

That is much higher than for the High Street banks, where NIM is more typically about 3%.

Ian Gordon at Investec thinks the stock is worth 325p and advises clients to sell.

Chief executive Steve Pateman said Shawbrook will generate “significant value for our shareholders over and above that implied in the current offer” from Pollen Street. @SimonEngStand