Suitors extend Shawbrook takeover offer deadline

Shawbrook Group suitor Pollen Street has extended its offer deadline as it looks to coax more shareholders to support its takeover offer of the challenger bank.

Pollen's Marlin Bidco consortium with bid partner BC Partners so far has 45.1% of acceptances, including Pollen's 39% stake, and needs to get valid acceptances of at least 50% in order to push through a takeover of Shawbrook.

The private equity groups on Friday extended the offer deadline by a week to 1300 BST on 26 May, with the possibility that this could be extended further.

At the end of March the FTSE 250-listed rejected Marlin's formal £842.4m takeover offer, with Pollen's 330p offer at a 14% premium to the price at which it floated the bank back in April 2015.

Shawbrook's board, which has excluded Pollen Street partner Lindsey McMurray from discussions due to conflict of interests, said they took into account the terms of the proposal, the board's confidence in the current strategy and feedback from its major institutional shareholders.

Marlin has said that if the level of shareholder support for the offer is only between 50-75%, it may keep Shawbrook as a listed company as it is today, or may be delisted and return to private ownership if it gets more than 75% of the vote.

Shares in Shawbrook were broadly flat in early trade on Friday at just under 340p, with the price having remained largely static at that level in recent weeks, pricing in some hope of an improved offer.

Analysts at Shore Capital said they continued to believe that Marlin will eventually gain the number of acceptances required to execute a takeover, "but that it may need to increase its offer slightly in order to achieve this", suggested 450p as fair value.

"With the shares currently trading at a slight premium to the offer of 330p plus the final dividend of 2.7p, it would appear that the market is already pricing in a modest increase," ShoreCap said.

Investec agreed that it does not discount the possibility of a modestly improved offer and any further extension, if applicable, is likely to be announced on 30 May.

"This may yet materialise, albeit in our judgement, any such offer is unlikely to represent a very material premium to the current share price," analysts wrote, noting that by contrast, other specialist banks’ have enjoyed a modest re-rating over the past seven weeks, supported by notably strong first quarter updates.