Shares in Metro Bank have surged after it received an approach about a possible takeover by the US private-equity group Carlyle.
The market value of the challenger bank, which did not say how much Carlyle might pay if a firm offer was made, soared to more than £242m in early trading on news of the deal as its share price rose by more than 40% on Thursday.
“Metro Bank has engaged with Carlyle in relation to its possible offer and a further announcement will be made as and when appropriate,” the company said. “In the meantime, shareholders are advised to take no action.”
Carlyle has until 2 December to make a formal offer or walk away, under UK takeover rules. The possible offer comes as the bank continues to work to revive its fortunes after an accounting scandal in 2019.
The scandal resulted in the resignation of the chair, Vernon Hill, who founded the company in 2009, who had previously said that he would “probably die” before stepping down. He was followed two months later by the chief executive, Craig Donaldson.
Last year, the bank significantly scaled back expansion plans after reporting a loss of more than £130m caused partly by the accounting error.
The scandal prompted speculation that the bank may become a possible takeover target as its share price tumbled.
While Metro Bank’s share price is up more than 130% over the past year, to about 140p, it remains at a third of the 400p it was trading at three years ago. When the company floated on the stock market in 2016 it was valued at £1.6bn.
Speculation about consolidation in the banking sector has also been fuelled more recently by hopes that rising interest rates might boost the future prospects of challengers which have struggled to compete against the high street giants.
Last year Metro Bank moved to acquire the peer-to-peer lender RateSetter in a deal worth up to £12m.
In July, Dan Frumkin, the bank’s chief executive, said attempts to revive its fortunes were “beginning to bear fruit”, with half-year pre-tax losses reducing from £240m to £139m year-on-year.
Carlyle declined to comment on the possible takeover.