Investors in Shawbrook, the challenger bank which caught the eye of private equity firms BC Partners and Pollen Street Capital, have today received an increased offer from the consortium.
BC and Pollen Street have upped their takeover bid by 10p per share, now valuing the business at around £868m.
The consortium's first formal bid of 330p per share valued the business at £842m, or £825m without the 2.7p dividend and share capital to be issued following the takeover.
Today was the final day for the consortium to increase its bid again, ahead of a 19 June acceptance deadline.
Its other option was to wait and see if enough shareholders would give in and take the bidders up on their lower offer, which was clearly one gamble too far for BC and Pollen Street.
As well as advising shareholders not to accept the first formal takeover offer of 330p per share, Shawbrook also declined a number of offers ranging from 307p to 330p structured under a scheme of arrangement.
This would given Shawbrook the reins in the takeover process, as such an offer requires approval from 75 per cent of shareholders meaning it realistically needed the cooperation of the board.
But when the board told shareholders to sit tight, BC and Pollen Street decided to appeal directly to shareholders with a straight takeover offer.
For this, they must only persuade a 50 per cent plus one majority to accept the offer.
As of Friday, the consortium owned around 46 per cent of the challenger bank, having received a few acceptances on top of the 38.9 per cent stake which Pollen Street – a financial services investor – already owned.
The proposed deal comes as Pollen Street, which spun out of Royal Bank of Scotland (RBS) in 2013, announced a takeover of asset manager MW Eaglewood, creating one of Europe's largest investment managers focused on specialist lending.
As well as its private equity business, Pollen Street also manages the Honeycomb Investment Trust which acquires loans made to consumers and small businesses.