Co-op Bank sale process muddied after reports prospective buyer failed to bid
One of the potential suitors for Manchester-based Co-operative Bank has failed to submit a bid, it has been reported.
Sky News says Aldermore Group decided not to submit an offer ahead of a deadline earlier this month, due to a leadership shake-up at its owner, South Africa banking group First Rand.
Mid-sized consumer and business lender Aldermore hired advisers to work on a takeover bid in September, it was claimed.
It was said to be working with investment bankers on BNP Paribas on the size and structure of an offer for Co-op Bank.
It followed Co-op Bank’s cool reaction to claims in August that Shawbrook had mooted a £3.5bn merger between the two banks. A Co-op spokesman dismissed the reports as “media speculation” and declined to comment further.
However, the latest developments could mean that Shawbrook is the only known bidder for the Co-op Bank, which has been put up for sale by the syndicate of financial investors which own it.
City sources claim a number of other parties could still be interested in bidding, possibly Paragon Banking Group and OneSavings Bank.
Co-op Bank has narrowly avoided collapse on two recent occasions.
In 2013, a bid to acquire the branch network which became TSB collapsed when the Co-op Bank itself was mired in a crisis that resulted in its £1.5bn rescue by American hedge funds and the departure of its chairman, Paul Flowers, following tabloid revelations regarding his private life.
Then, in 2017, two more investors, Bain Capital Credit and JC Flowers, took a 10% stake in the company in a subsequent bailout.
In 2020 the prospect of a sale to Cerberus Capital Management came to nought, and two years ago the bank made a merger approach to Spanish-owned TSB, but nothing transpired.
In August this year Co-op Bank completed its first portfolio acquisition in more than a decade, buying Sainsbury’s Bank’s mortgage portfolio for a cash consideration of around £464m.
The portfolio comprises around 3,500 customers with balances of approximately £479m.
In July this year Co-op Bank said it had delivered a “strong” interim financial performance.
In the six months to June 30, 2023, the bank achieved a total income of £266.5m, up from £229.6m, although pre-tax profits were static at £61.8m.
