Key facts
- Metro Bank has been approached by private equity firm Pollen Street Capital about a potential buyout.
- The talks are at an early stage, and there is no certainty of a deal.
- Pollen Street Capital has a stake in Shawbrook Bank, which previously bid for Metro Bank.
- A deal could lead to consolidation in the specialist mortgage sector.
- Metro Bank's shares rose 13% on the news, valuing the business at £853m.
- Metro Bank was subject to a £925m rescue deal in November 2023.
Metro Bank has been approached by private equity firm Pollen Street Capital regarding a potential takeover, according to reports. The discussions are in their early stages, and there is no certainty that a deal will be reached.
Pollen Street Capital, which has existing stakes in other UK financial services firms including Shawbrook Bank, reportedly made an informal approach to Metro Bank in recent weeks. This potential deal could lead to consolidation within the specialist mortgage sector.
Shares in Metro Bank saw a significant increase of 13% in mid-morning trading, valuing the business at £853m, though this is approximately half of its peak valuation. The bank has faced regulatory setbacks in the past, including a £350m share issue in 2019 after admitting to misclassifying commercial loans, which led to investigations by the Financial Conduct Authority and the Prudential Regulation Authority.
Metro Bank was rescued in November 2023 through a £925m deal that included £325m in equity, with a substantial contribution from Colombian billionaire Jaime Gilinski Bacal, who now holds a nearly 53% stake. Shawbrook Bank, which also has a significant loan book in its retail home loans and real estate divisions, had previously bid for Metro Bank in 2023 when the latter was seeking emergency funding.
Any potential acquisition by Pollen Street Capital could result in Metro Bank losing its listing on the stock market. Neither Metro Bank nor Pollen Street Capital have commented on the reports.