Private equity groups extend hostile offer for Shawbrook

LONDON (Reuters) - The private equity groups behind a hostile bid for British challenger bank Shawbrook Group SHAW.L said on Friday they had backing from investors holding 45.1 percent of its shares, and were extending the offer period.

The 842 million pounds ($1.09 billion) offer would now remain open until May 26, Marlin Bidco, the buyout vehicle set up by BC Partners and Pollen Street Partners, said in a statement. The previous deadline was Thursday and the date could be extended to June 19.

The 45.1 percent includes Pollen Street’s Shawbrook stake, which is 38.8 percent according to Thomson Reuters data. The commitments were still 4.9 percent short of the 50 percent threshold at which the deal would become unconditional.

The company would be delisted if 75 percent of its shareholders accept the offer, with those who do not accept the offer remaining holders of shares in an unlisted company.

On Friday, Shawbrook shares were up 0.15 percent at 340 pence.

“(We) still do not discount the possibility of a (modestly) improved offer, but equally we continue to see materially greater upside potential among the currently ‘distressed’ valuations of high-performing “challenger bank” peers,” a note from Investec said.

Shawbrook’s directors had told shareholders to reject the offer.

A source familiar with the matter however said large long-only funds have sold out at valuations around the offer price, indicating that some large shareholders believe the offer is a good one.

Morgan Stanley MS.N is acting as financial adviser to Marlin Bidco.

Reporting by Simon Jessop; Editing by Rachel Armstrong and Elaine Hardcastle