Co-Op Bank receives preliminary takeover approach

The Co-Operative Bank has received a possible takeover approach, the hedge fund-owned lender revealed on Tuesday.

The UK bank said it had been approached by an unnamed financial sponsor "with knowledge and experience of investing in European financial services businesses" and that its advisors were now providing them with information "to help assess the prospects of this approach".

"The bank continues to be in discussions with this financial sponsor, although such discussions remain at a preliminary stage," it said.

It did not provide any further details, including the size of the offer, other than to confirm it was non-binding.

The Co-Operative Bank faced collapse in 2013 following the discovery of a £1.5bn black hole. It was eventually bought out by a consortium of hedge funds, including Silver Point Capital, GoldenTree and Anchorage Capital, following a second rescue deal in 2017 worth around £700m.

In August, the loss-making bank said it was cutting around 350 jobs and closing 18 branches because of the Covid-19 pandemic.

Tuesday’s update follows a similar announcement from Sainsbury’s Bank, which has received a preliminary approach, reportedly rumoured to be from NatWest Group. And on Monday, it was confirmed that Sabadell - the owner of TSB - was in merger talks with larger rival Spanish rival BBVA.