Metro Bank shares surged more than 15% on Monday, reaching 130p, after reports emerged that Pollen Street Capital is preparing a takeover bid for the UK challenger bank.

The London-based private equity firm has reportedly approached Metro Bank’s leadership regarding a potential deal that could take the lender private and off the London Stock Exchange. The move has also fuelled speculation that Metro Bank could be merged with Shawbrook, another Pollen Street-backed business lender.

A transaction of this scale would mark a significant shift for Metro Bank, which has undergone a turbulent turnaround following its near-collapse in 2023. That crisis led to a £925m rescue deal, with Colombian billionaire Jaime Gilinski Bacal now owning a controlling 53% stake in the bank.

The prospect of a private equity takeover introduces fresh uncertainty for Metro’s 3,000 employees, particularly after recent restructuring measures resulted in around 1,000 job cuts. The bank has also scaled back its costly branch network and reduced operating hours across its 75 locations.

Founded in 2010 by US billionaire Vernon Hill, Metro Bank was the UK’s first new high street bank in over a century. Its early customer-friendly model – including dog-friendly, seven-day-a-week branches – earned it a loyal following, but operational missteps, including a 2019 accounting scandal, led to a dramatic erosion of shareholder value.

While no formal offer or valuation has been disclosed, the deal could offer an attractive exit for long-suffering shareholders, who saw shares fall to nearly 30p following the bank’s regulatory and capital struggles.

Metro Bank, Pollen Street Capital, and Shawbrook declined to comment.

Source: The Guardian

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