Aldermore’s decision to abandon its bid for the Co-operative Bank raises questions about its future strategy under CEO Steven Cooper.
In a surprising turn of events, Aldermore Group, one of Britain’s biggest challenger banks, has decided not to submit an offer for the Co-operative Bank after its CEO unexpectedly resigned. This move leaves Shawbrook as the only known bidder for the Co-operative Bank, which is currently up for sale by its syndicate of financial investors.
Analysts had previously identified Aldermore as the most logical strategic buyer for the Co-operative Bank, but the bank’s plans were reportedly derailed by a leadership shake-up at its South African parent company, FirstRand. Other potential bidders, including Paragon Banking Group and OneSavings Bank, have also not yet submitted offers.
Shawbrook, another medium-sized British bank, has approached the Co-operative Bank’s advisers with a merger proposal worth £3.5 billion. However, the offer largely consists of Shawbrook shares, and it remains uncertain how attractive this proposal would be to Co-op Bank shareholders.
The Co-operative Bank’s sale is a relief for regulators who have been involved in its rescues over the past decade. In 2013, the bank’s bid to acquire the branch network that became TSB collapsed, leading to a £1.5 billion rescue from American hedge funds. The bank required further bailout in 2017, with Bain Capital Credit and JC Flowers taking a 10% stake in the company.
The sale of the Co-operative Bank is ongoing amidst turbulence in the wider banking sector. Metro Bank, for example, recently had to raise emergency funding through debt and equity markets.
Aldermore’s withdrawal from the bidding process raises questions about the bank’s future strategy under CEO Steven Cooper. It remains to be seen how this decision will impact Aldermore’s position in the banking industry and its ability to compete with other challenger banks.