U.K.’s Metro Bank (LON:MTRO) Gets Takeover Interest from Carlyle Group Inc

According to sources familiar with the matter, British lender Metro Bank Plc is being pursued by Carlyle Group Inc. for a takeover.

According to people familiar with the matter, the buyout firm is currently studying the possibility of Metro Bank being acquired. Metro Bank shares have dropped 25% in London trading this past year, giving it an estimated market value of 180 million pounds ($245million).

Metro Bank, the first new retail bank in the U.K. to open in over a century was opened in 2010. It is well-known for its extensive branch network in high-end locations such as King’s Road in Chelsea. It was established to challenge incumbents like Barclays Plc or Lloyds Banking Group Plc, whose reputations had been damaged by the 2008 global financial crisis.

However, Metro Bank’s image suffered a serious blow in 2019 when U.K regulators Prudential Regulation Authority and Financial Conduct Authority opened an investigation into whether it misclassified assets. Since then, shares have fallen in the bank, which at its peak had a market worth of 3.6 billion pounds.

People said that deliberations are ongoing and they don’t guarantee that there will be a formal offer. Metro Bank spokesperson could not immediately comment while a representative of Carlyle declined to comment.

Last month’s third-quarter trading update by Metro Bank featured Daniel Frumkin, Chief Executive Officer. He stated that the bank had made improvements to its lending mix and was beginning to see signs of a “gradual recovery from normality.”

Carlyle’s possible move is yet another sign of the long-awaited consolidation of smaller U.K lenders.

Spain’s Banco Sabadell SA stated in October that it had rejected a U.K. Co-operative Bank Holdings Ltd. bid to take control of rival lender TSB Bank Plc. The tie-up would have created an 8 million customer bank with mortgages, current accounts and other savings products if it had been completed.

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