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Metro Bank rejects takeover offers from Shawbrook, engages in discussions for debt restructuring and equity injection

Metro Bank Rejects Takeover Approaches from Shawbrook, Discusses Debt Restructuring and Equity Injection

British lender Metro Bank has turned down a series of takeover offers from specialist business lender Shawbrook, according to media reports. The bank is now in talks with bondholders regarding an equity injection alongside a debt restructuring.

Rejection of Takeover Approaches

Metro Bank has reportedly rejected several takeover approaches from Shawbrook, including one made in September. The valuation of Shawbrook’s offers remains unknown, and it is unclear if ongoing discussions between the two companies are taking place.

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Bondholder Talks and Debt Restructuring

Bloomberg News has reported that Metro Bank is engaged in discussions with bondholders about an equity injection. This injection would be carried out alongside a debt restructuring, with the aim of extending the maturity of outstanding senior debt and converting subordinated debt into equity.

The proposed refinancing package, totaling over £500 million ($611.90 million), is being negotiated with bondholders. As part of this plan, Metro Bank’s £250 million tier 2 notes would be converted into equity, and the maturity of £350 million of senior bonds due in 2025 would be extended.

Response from Metro Bank and Shawbrook

Metro Bank declined to comment on the reports, as did Shawbrook. Additionally, Metro Bank’s largest shareholder, Colombian billionaire Jaime Gilinski, has not provided an immediate response.

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Funding Options and Shareholder Discussions

In an effort to strengthen its capital levels and reassure regulators, Metro Bank is set to discuss funding options with its shareholders over the weekend. This comes after a volatile week of trading, during which the bank’s shares plummeted following reports of its intention to raise up to £600 million.

About Shawbrook

Shawbrook is a London-based specialist lender that serves real estate professionals, small and medium-sized enterprises (SMEs), and consumers. The company’s loan book is valued at £10.5 billion, according to its website.

($1 = £0.8171)

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