Britain’s mid-sized Metro Bank gets Carlyle bid approach

Nov 12, 2021 | News

Metro Bank said it has received a takeover approach from U.S. private equity firm Carlyle, sending its battered shares by as much as 31% higher, in a sign of growing interest in Britain’s mid-sized banks.

Metro Bank, which had a market capitalisation of $242m at Wednesday’s closing price, said it was engaging with Carlyle.

But it added in a statement there was no certainty an offer would be made and advised its shareholders to take no action.

Shares in Metro Bank, which have slumped around 57% since February 2020 as they and other mid-sized lenders struggled with low interest rates and competition, were up 29% at 1125 GMT and heading for their best ever one-day performance.

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Metro Bank has been working to turn around its fortunes after a major accounting error in 2019 forced out its top bosses and led to a significant share price fall.

Dealmaking involving British banking has picked up recently, with Co-operative Bank making an unsolicited offer for TSB, the British subsidiary of Sabadell. The Spanish bank rejected the bid for TSB last month.

Metro Bank, which was launched more than a decade ago to challenge Britain’s incumbent high street lenders, has struggled to generate profits from a growing deposit base.

But its losses narrowed in July as Britain’s economy recovered from the COVID-19 pandemic, which had left smaller banks more vulnerable compared with their larger and more diverse rivals as interest rates hit record lows.

Source: Reuters

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