Metro Bank surges as Pollen Street said to have made takeover approach

(Sharecast News) - Metro Bank shares surged on Monday following reports over the weekend that it has been approached by private equity firm Pollen Street Capital about a possible takeover. According to Sky News, Metro was approached in the last fortnight about an offer to take it private spearheaded by the financial services-focused buyout firm.

Pollen Street is one of the major shareholders in Shawbrook, the mid-sized bank which in the past has approached Metro Bank about a merger of the two companies.

According to Sky, in recent months, Shawbrook's owners have stepped up efforts to identify a prospective corporate combination, holding tentative talks with Starling Bank about a £5bn tie-up, while also drawing up plans for a stock market listing.

At 0935 BST, Metro Bank shares were up 11.8% at 125.45p.

Metro declined to comment on the report.

Russ Mould, investment director at AJ Bell, said: "Metro Bank has been on a rollercoaster of a journey, becoming one of the fastest growing banking names on the UK high street before going through a rocky patch that resulted in an emergency fundraise.

"Metro has since repositioned itself as a business banking provider and investors have slowly regained confidence in the company. The shares have been on a big run over the past year, albeit only putting them back to a two-year high and still a fraction of 2018 highs.

"With the market now looking more favourably on the business, it's no surprise to see takeover speculation as strategically, Metro Bank is in a much better place. What's unknown is the price that a suitor such as Pollen Street would be prepared to pay, as the shares are not cheap versus earnings expectations for 2025. A suitor would need to take a longer-term view of Metro Bank's potential to warrant paying a big premium to the current market price."