Metro Bank shares have surged to a two year-high after news of a takeover approach by a London private equity firm that could create uncertainty for customers and staff.
It emerged over the weekend that Pollen Street Capital has sounded out Metro bosses over a potential deal, which could take the listed lender off the London Stock Exchange and back into private hands.
The rumours have also sparked speculation that Metro would ultimately be merged with another of Pollen’s companies, the specialist business lender Shawbrook.
The news sent Metro Bank shares up by more than 15% to a high of 130p on Monday.
A private equity takeover and potential merger would create further uncertainty for the bank’s employees, who have just emerged from a cost-cutting programme that resulted in roughly 1,000 job losses. About 3,000 staff survived the latest round of cuts, which were part of turnaround efforts followingthe bank’s near failurein October 2023.
Any further cuts could raise questions about services for Metro’s 3 million customers, including those services offered across its costly branch network. The bank has already cut back on opening hours across its 75 branches, which were originally open seven days a week.
While no price has been attached to Pollen’s prospective offer, a sale could result in a windfall for some of Metro’s shareholders, who saw shares dip to nearly 30p months after the bank was forced into a rescue deal.
Metro was the first high street bank to open in the UKin more than 100 yearswhen it was launched by the US billionaire Vernon Hill in 2010. It attracted a wave of customers, and offered dog-friendly branches with seven-day opening.
But the bank suffered in the years that followed. Itsshare price was all but wiped out in 2019after an accounting error led to the resignation of it top executives and founder. It took a further dive in 2023 when it emerged that the bank would need more cash from investors after it failed to convince regulators that Metro could be trusted to assess its own risks.
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The Colombian billionaire Jaime Gilinski Bacal now holds a 53% stake in the lender as part of the £925m rescue deal in 2023, which was three years after he started building a stake.
Metro Bank, Pollen Capital and Shawbrook all declined to comment.