Shawbrook Group, a UK-based small business lender backed by private equity firms including BC Partners and Pollen Street Capital, is planning a £3.5bn merger with Co-operative Bank in what would be one of the most significant UK banking deals since the 2008 financial crisis, according to a report by The Telegraph.
Shawbrook Group has reportedly approached the Co-operative Bank’s owners in recent weeks with proposals for a stock-based merger of the two companies.
According to reports, Barclays has been hired to advise on the bid, which would value the Co-operative Bank at around £800m.
Formerly part of the Co-op Group, the Co-operative Bank, which has 2.7 million retail customers, was sold to a group of hedge fund investors in 2017 after it came close to collapse.
As well as Shawbrook’s approach, the bank’s owners are reportedly also considering a wider auction of the asset, with OneSavings Bank, Aldermore and Paragon among several other potential suitors.
