BC Partners and Pollen Street sweeten offer for Shawbrook

Marlin Bidco, the buyout vehicle set up by BC Partners and Pollen Street Partners, has upped its offer for Shawbrook Bank.

The private equity groups have lifted their offer by 10p to 340p a share, valuing the company at around £868m. The offer, which is final, represents a 28% premium to Shawbrook's closing price on 2 March.

Lindsey McMurray of Pollen Street Capital and Cédric Dubourdieu of BC Partners said: "After carefully considering market feedback we are pleased to be able to make an improved best and final offer, which we consider offers shareholders an attractive premium and compelling value. We continue to share the Shawbrook management team's vision and look forward to working with them in the future to build on the company's strong foundations as a specialist lender."

The private equity firms, which already have a 38.8% stake in Shawbrook, had received acceptances from investors holding another 6.6% of the shares for their previous offer of 330p a share, leaving them short of the 50% backing required for the deal to proceed.

Shore Capital said: "We continue to believe that Marlin Bidco will eventually gain the number of acceptances required to gain control and that the increased cash offer should help it to achieve this. Although we believe a fair value of at least 450p can be justified, the high likelihood in our view of control being gained at a much lower price, in our view, means that we maintain a neutral stance."

Meanwhile, Investec said the improved offer undervalues Shawbrook on a 12-month view, and considerably undervalues the business if management is able to deliver against its '2020 vision' presented to the market in May 2016.

"However, we also see the sub-sector as undervalued, so if the deal proceeds, Aldermore (Buy) and OneSavings (Buy) offer attractive reinvestment options."

At 1440 BST, Shawbrook shares were down 0.3% to 338.90p.