The board of Aldermore bank has agreed to a £1.1bn takeover by South Africa’s FirstRand.
The offer from the financial services firm, whose business interests range from investment and retail banking to asset management, will see it fork out 313p per share.
It represents a 22% premium to Aldermore’s closing share price on October 12 and values the challenger bank launched in 2009 at £1.1bn.
FirstRand said it aims to diversify Aldermore’s proposition in the UK, with the possible addition of services such as car financing, personal loans and insurance.
The offer is subject to a shareholder vote but the board has recommended investors back the deal.
FirstRand chief executive Johan Burger said: “We are very pleased that the board of Aldermore, one of the UK’s leading specialist lenders, will be recommending our offer.
“The transaction is the latest step in our strategy of protecting and building shareholder value by achieving a more diversified revenue profile and we believe it will provide the platform to fulfil our growth objectives in the UK.