Key facts
- Cerberus and Warburg Pincus are pursuing a joint bid for Aldermore.
- FirstRand, Aldermore's owner, is seeking to sell the UK specialist bank.
- FirstRand has set aside £750 million ($1.01 billion) for potential compensation related to mis-sold loans.
- CVC Capital Partners and JC Flowers are also considering a potential £1.4 billion bid.
- Prospective buyers were asked to submit non-binding offers by Tuesday.
Private equity firm Cerberus has joined forces with Warburg Pincus in a bid to acquire Aldermore, a UK specialist bank. This move is part of a broader auction for the lender, as its current owner, South Africa's FirstRand, aims to exit the UK market.
FirstRand's decision to sell Aldermore follows a substantial increase in provisions for the UK's motor finance redress scheme, for which it has set aside £750 million ($1.01 billion) to cover potential compensation for mis-sold loans. The bank has requested non-binding offers from potential buyers, with the initial deadline set for Tuesday.
In parallel, private equity giant CVC Capital Partners has partnered with financial services investor JC Flowers to pursue a potential acquisition of Aldermore, reportedly valued at around £1.4 billion. Other potential suitors, including NatWest, Centerbridge, Metro Bank, and Lloyds, are also understood to be considering bids. RBC analysts have estimated Aldermore's value at approximately £1.35 billion excluding its motor finance operations, and up to £1.45 billion with that business included.