Metro Bank has received a takeover proposal from private equity firm Pollen Street Capital, which could lead to the high street lender becoming a private entity. This move has heightened concerns about the declining number of companies listed on the London Stock Exchange (LSE).
The approach, made within the last two weeks, is still in preliminary discussions and has not resulted in a formal bid. Pollen Street, which co-owns Shawbrook Bank with BC Partners, is known for its investments in financial services and has been frequently mentioned as a potential buyer of Metro Bank.
Should this acquisition proceed, it would mark a significant shift for Metro. The bank was launched in 2010 with the goal of shaking up the British banking scene and was the first new high street bank to open in over a century. It went public on the LSE in 2016 and once had a market value of £3.5 billion but is now valued at approximately £750 million following various setbacks, including a major accounting scandal in 2019.
In 2023, Metro Bank narrowly avoided collapse thanks to a complex refinancing deal that gave Colombian billionaire Jaime Gilinski Bacal a 53% controlling stake. While the bank’s share price has tripled since then, its valuation remains much lower than it once was.
Under the leadership of CEO Daniel Frumkin, Metro has been refocusing its business strategy, prioritising business banking over retail and streamlining its operations to 75 branches with about 3,455 employees.
If Pollen Street’s bid is successful, it would be another sign of consolidation among UK challenger banks. Shawbrook itself is reportedly considering a public listing, but may now look to grow through acquisitions.
The Metro Bank announcement comes amid increasing worries regarding the waning attractiveness of the LSE. Over 30 companies have either delisted or are planning to leave the exchange this year, often due to private equity takeovers or relocations to more favourable foreign markets.
Selling Metro Bank to a private buyer would further highlight the challenges facing public UK companies, such as low valuations, stricter regulatory scrutiny, and a shift by investors toward private markets.
Neither Metro Bank nor Pollen Street Capital have commented on the reports. However, regulators and investors are watching the situation closely as it could signal ongoing private equity interest in underperforming or undervalued listed assets.
For more, read here: [Metro Bank takeover approach adds to fears of London Stock Market exodus](https://bmmagazine.co.uk/news/metro-bank-takeover-approach-adds-to-fears-of-london-stock-market-exodus/)
