U.S. private equity firm Carlyle said that the talks about a possible takeover offer for Metro Bank have ended. This is by sending shares in the British lender tumbling 16%. Metro Bank had announced the takeover approach from Carlyle. For this announcement from Carlyle, the lender responded that the board continues to strongly believe in the standalone strategy and future prospects of Metro Bank.
Neither company gave any reasons for the negotiations falling through. Shares in Metro Bank, with a market capitalisation of 227 million pounds, fell 16% to 110.8 pence. The bank‘s share price had jumped on the announcement of the takeover talks. But has halved since February 2020. Also, other mid-sized lenders struggled with low interest rates and competition. Metro Bank has been working to turn around its fortunes. This is especially after a major accounting error in 2019, which forced out its top bosses and led to a significant share price fall.
Metro Bank was launched more than a decade ago. This is mainly to challenge Britain’s incumbent high street lenders. It had many losses which finally narrowed in July as Britain’s economy recovered from the pandemic. This left smaller banks more vulnerable, when compared with their larger and more diverse rivals as interest rates hit record lows. John Cronin, banking analyst at Goodbody, said that the bank was on track to return to profitability in 2023 under its own turnaround plan. In a note he stated that there is also, the prospect that other would-be buyers emerge from the woodwork in the wake of the Carlyle approach.
