The Co-operative Bank says it has attracted a number of "credible" buyers

 
Caitlin Morrison
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The Co-op Bank Puts Itself Up For Sale
The Co-operative Bank put itself up for sale last month (Source: Getty)

Several "credible" parties have expressed their interest in buying the Co-operative Bank, the lender said today.

The bank, which put itself up for sale last month, said in an update to the market: "A number of credible strategic and financial parties have expressed interest in the sale process and are currently evaluating information on the bank.

"The bank has requested that preliminary expressions of interest should be submitted in the first half of April."

Just yesterday, challenger bank Secure Trust ruled out making a bid for Co-op.

Next steps

Following an assessment of the preliminary expressions of interest, the bank said plans to proceed to a second phase of the sale process where selected parties will be provided with additional information in order to continue their due diligence with a view to making an offer for all of the issued ordinary share capital of the bank.

The Co-op Bank cautioned there can be no certainty that an offer will be made, or that any offer that is made will be on terms acceptable to the bank and its shareholders.

In parallel with the second phase of the sale process, the bank said it will continue to have discussions with existing equity and debt security holders as well as new potential investors on a capital raise alternative to the sale process.

A number of US hedge funds came to the rescue of the ethical lender four years ago, bailing it out after the lender revealed losses of £600m and a capital shortfall of £1.5bn.

The funds – which include Aurelius, Silverpoint and Monarch – swapped debt for equity positions with previous parent, the Co-operative Group, reducing its stake to just 20 per cent.

Regulatory approval

The Co-op said it has "fully discussed, and will continue to discuss, both the sale process as well as the liability management exercise and equity capital raise with the Prudential Regulatory Authority (PRA), which has welcomed the actions being taken".

The Bank of England's PRA stepped in earlier this month to draw up alternative plans for Co-op Bank, amid concerns that the lender won't be able to find a buyer.

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