Shawbrook's share price is sliding after its largest investor sells 10 per cent stake

James Nickerson
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Special Opportunities Fund is selling 25m shares in Shawbrook (Source: Getty)

Challenger bank Shawbrook's share price was one of the largest fallers on the FTSE 250 this morning, after its largest shareholder announced plans to sell its stake in the company.

Special Opportunities Fund (SOF), the shareholder, is planning to sell a ten per cent stake.

Shawbrook's share price was down 7.7 per cent at 332.8p per share in late morning trading.

Read more: Challenger Shawbrook posts 68 per cent increase in profits

The sale will involve 25 million shares. The final offer price was set at 335p per share.

While Shawbrook's share price has fallen this morning, Investec analyst Ian Gordon pointed out that "over the past six weeks, the scale of Shawbrook's share price outperformance had been quite extreme; up over a period in which all FTSE 100 banks bar HSBC have fallen". He added:

We continue to believe that, over the medium term, Shawbrook offers a solid, well-capitalised and defensive play at the “specialist” end of the challenger bank segment, with broader product diversity than a number of its peers.

The news comes as Aldermore, another challenger bank, reported loan growth of about £1bn over the last nine months, bringing total net loans to customers to £5.8bn, an increase of 20 per cent from 31 December 2014. Aldermore's share price was trading 4.09 per cent down at 276.45p per share in late morning trading.

Read more: Aldermore banks on houses in third quarter results

After selling the shares SOF will hold 111.5m shares in the Shawbrook, representing 44.6 per cent of the issued share capital of the company.

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