Metro Bank (LON: MTRO), the UK high-street lender, has put itself up for sale, launching a Formal Sale Process at 7am today. Its shares rose 3.6% at the open, though the bank says it has received no approach from any potential buyer.
The shares opened at 185p, up 6.4p on yesterday’s close of 178.6p, a gain of 3.58% that coincides with the announcement, which came before the market opened. That is just below the 188.4p 52-week high set last Thursday. The stock had already jumped from 152.6p to 179.2p on the day of its third-quarter update, last Wednesday.
The board announced a Strategic Review of options to accelerate growth, including the Formal Sale Process, a Takeover Panel-approved auction for the company. It invites expressions of interest in all of the ordinary shares, with Morgan Stanley as lead financial adviser. The announcement starts an offer period, the time when takeover dealing rules apply.
Interested parties must first sign a non-disclosure and standstill agreement, under which they keep information secret and agree not to buy shares or bid outside the process. The Takeover Panel, which administers the Code, has waived the usual 28-day “put up or shut up” deadline and the requirement to name bidders for parties in the process, so news flow may be slow.
Holders of 1% or more must also publicly declare their stakes through Opening Position Disclosures, which will show who holds the larger stakes.
The board stresses that the sale process sits alongside its standalone plan. It says it remains highly confident in that plan and in its guidance, reaffirmed in the third-quarter update, and explains why it is testing interest:
the Board unanimously believes that evaluating potential interest in the Company through an FSP, alongside continuing to execute the standalone plan, will maximise the value creation opportunities available to shareholders and deliver benefits for all stakeholders.
Metro Bank Board of Directors
The board can alter or end the process at any time, and says that if it produces no transaction, the company will carry on with its strategy and guidance. It adds there is no certainty of an offer, and will make further announcements, including on timetable, as appropriate. Shareholders are advised to take no action.