Al­der­more taken over by South African FirstRand

Yorkshire Post - Business - - FRONT PAGE - MARK CASCI BUSINESS EDI­TOR ■ Email: mark.casci@ypn.co.uk ■ Twit­ter: @MarkCasci

THE BOARD of chal­lenger bank Al­der­more has agreed to a £1.1bn takeover by South Africa’s FirstRand.

The of­fer from the fi­nan­cial ser­vices firm, whose business in­ter­ests range from in­vest­ment and re­tail bank­ing to as­set man­age­ment, will see it fork out 313p per share.

It rep­re­sents a 22 per cent pre­mium to Al­der­more’s clos­ing share price on Oc­to­ber 12 and val­ues the firm at £1.1bn.

FirstRand said it aims to di­ver­sify Al­der­more’s propo­si­tion in the UK, with the pos­si­ble ad­di­tion of ser­vices such as car fi­nanc­ing, per­sonal loans and in­sur­ance.

The of­fer is sub­ject to a share­holder vote but the board has rec­om­mended in­vestors back the deal.

In to­tal, Al­der­more em­ploys around 900 peo­ple, in­clud­ing more than 20 staff based in Leeds from which it runs its Scot­tish op­er­a­tions. In an in­ter­view with The York­shire Post this spring its boss Phillip Monks con­firmed that it had plans to keep grow­ing in York­shire.

Mr Monks said of the takeover: “The of­fer re­flects our strong track record of de­liv­ery and FirstRand’s con­fi­dence in Al­der­more to con­tinue de­liv­er­ing on its sus­tain­able growth strat­egy.

“With the back­ing of FirstRand Group’s con­sid­er­able re­sources and wider ca­pa­bil­i­ties, we will be able to ac­cel­er­ate the de­liv­ery of our strat­egy and fur­ther ex­pand the prod­ucts and ser­vices we of­fer cus­tomers.

“Our vi­sion has al­ways been to bring more com­pe­ti­tion to UK bank­ing, and the sup­port of the FirstRand Group will en­able us to con­tinue to do just that.”

FirstRand chief ex­ec­u­tive Jo­han Burger said: “We are very pleased that the Board of Al­der­more, one of the UK’s lead­ing spe­cial­ist lenders, will be rec­om­mend­ing our of­fer. The trans­ac­tion is the lat­est step in our strat­egy of pro­tect­ing and build­ing share­holder value by achiev­ing a more di­ver­si­fied rev­enue pro­file and we be­lieve it will pro­vide the plat­form to ful­fil our growth ob­jec­tives in the UK.

“It will al­low the FirstRand Group to al­lo­cate more fi­nan­cial re­sources to our op­er­a­tions in Africa, whilst di­ver­si­fy­ing earn­ings in the UK.

“The team at Al­der­more have built a fan­tas­tic bank in a short pe­riod of time and we look for­ward to work­ing closely with them to iden­tify fur­ther growth op­por­tu­ni­ties.

“Al­der­more, un­der the lead­er­ship of Phillip Monks, joins our multi-branded port­fo­lio of lead­ing fi­nan­cial ser­vices fran­chises, First Na­tional Bank, Rand Mer­chant Bank, WesBank and Ash­bur­ton In­vest­ments.

“FirstRand’s unique op­er­at­ing model and or­gan­i­sa­tional cul­ture em­pow­ers the man­age­ment teams of th­ese fran­chises to for­mu­late and ex­e­cute on their re­spec­tive growth plans within the group’s strate­gic frame­work.

“This ap­proach has re­sulted in a track record of su­pe­rior growth and re­turns.

“In mak­ing this of­fer FirstRand care­fully con­sid­ered how cur­rent and po­ten­tial macroe­co­nomic fu­ture sce­nar­ios in the UK could im­pact the broader business.

“We are very com­fort­able that the fi­nan­cial im­pact of this trans­ac­tion is sup­port­ive of FirstRand’s pre­vi­ous guid­ance to share­hold­ers on growth, re­turns, cap­i­tal po­si­tion and div­i­dend pol­icy.”

Al­der­more – which lends to small and medium-sized busi­nesses, home-own­ers and land­lords – also an­nounced its thirdquar­ter re­sults, which saw net loans up 12 per cent to £8.4bn, driven by £2.4bn of new lend­ing.

Cus­tomer de­posits were up 8 per cent to £7.2bn.

The of­fer re­flects our strong track record of de­liv­ery.

Phillip Monks, boss of Al­der­more

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