UK Metro Bank shares slide as Carlyle acquisition talks end


An overview of the lobby in front of the offices of the Carlyle Group in Washington, May 3, 2012. REUTERS / Jonathan Ernst

November 18 (Reuters) – US private equity firm Carlyle (CG.O) said on Thursday that talks about a possible takeover bid for Metro Bank (MTRO.L) have ended, which will convert the UK lender’s shares 16% collapsed.

Metro Bank announced the takeover approach from Carlyle earlier this month.

“The board of directors still firmly believes in the independent strategy and future prospects of Metro Bank,” said the lender in response to Carlyle’s announcement.

Neither company gave reasons for the failure of the negotiations.

Metro Bank shares, which had a market capitalization of £ 227 million ($ 306.6 million) at the close of trading on Wednesday, fell 16% to 110.8 pence at 0830 GMT.

The bank’s share price jumped when the takeover talks were announced, but has halved since February 2020 as it and other medium-sized lenders struggled with low interest rates and competition.

Metro Bank has been working to change its fortune after a serious accounting mistake in 2019 ousted its top bosses and caused its share price to fall sharply.

Metro Bank, founded more than a decade ago to challenge UK established high street lenders, has struggled to generate profits from a growing deposit base.

However, losses narrowed in July as the UK economy rebounded from the COVID-19 pandemic, which left smaller banks more vulnerable compared to their larger and more diverse competitors as interest rates hit record lows. Continue reading

Goodbody’s banking analyst John Cronin said the bank is well on its way to returning to profitability in 2023 as part of its own turnaround plan.

“There is also, of course, the prospect that the Carlyle approach will create other potential buyers from the woodwork,” he said in a note.

($ 1 = 0.7404 pounds)

Reporting by Muvija M in Bengaluru and Carolyn Cohn in London, additional reporting by Iain Withers in London; Editing by Shailesh Kuber, David Evans and Emelia Sithole-Matarise

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