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.
“It will allow the FirstRand Group to allocate more financial resources to our operations in Africa, whilst diversifying earnings in the UK.”
Aldermore – which lends to small and medium-sized businesses, home-owners and landlords – also announced its third-quarter results, which saw net loans up 12% to £8.4bn, driven by £2.4bn of new lending. Customer deposits were up 8% to £7.2bn.
Aldermore CEO Phillip Monks said of the takeover: “The offer reflects our strong track record of delivery and FirstRand’s confidence in Aldermore to continue delivering on its sustainable growth strategy.
“With the backing of FirstRand Group’s considerable resources and wider capabilities, we will be able to accelerate the delivery of our strategy and further expand the products and services we offer customers.
“Our vision has always been to bring more competition to UK banking, and the support of the FirstRand Group will enable us to continue to do just that.”