Shawbrook shares surge again as backers return with formal bid
Shawbrook Group
339.50p
16:34 23/08/17
Shawbrook Group has rejected a formal £842.4m takeover offer from existing private equity backer Pollen Street Capital and its bid partner BC Partners.
Banks
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16:54 03/05/24
FTSE 250
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17:00 03/05/24
FTSE 350
4,515.50
16:54 03/05/24
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4,469.09
17:14 03/05/24
Although Pollen and BC, via a bid vehicle called Marlin Bidco, again offered 330p per share plus the final dividend of 2.7p, which was unchanged from the offer rejected by Shawbrook's board on 6 March, the offer was changed from a scheme of arrangement to a formal takeover offer, which means the private equity groups only need just over 50% of shareholders to accept.
Funds managed or advised by Pollen Street currently hold roughly 38.8% of the challenger bank but if supportive investors are included it has around 45% of the vote.
Concluding that it was not able to recommend the offer, the Shawbrook board recommended shareholders reject the offer and said it will set out its views in more detail shortly.
Marlin said that if the level of shareholder support for the offer is only between 50-75%, it may keep Shawbrook as a listed company as it is today, or may be delisted and return to private ownership if it gets more than 75% of the vote.
"We still think this represents a huge undervaluation, but given poor performance by management in defence so far, we would expect this to get done," said analyst Gary Greenwood at broker Shore Capital.
Keeping the listing would leave others as minority shareholders "that are dancing to its tune", he added, while a delisting would leave minority holders stuck with a holding in an untradeable equity in not which the principal shareholder has a six year investment horizon - neither being ideal.