Aldermore becomes latest ‘challenger’ to be swallowed up

FirstRand has offered 313p per share for Aldermore, a 22 per cent premium to Friday’s closing share price, which values the bank at £1.1bn.

On Monday, Aldermore’s board recommended the offer from FirstRand, and, with 25 per cent founder investor AnaCap welcoming the deal, it looks set to be approved.

The offer will be put to shareholders, but no date has yet been set for stakeholders to approve the deal.

Aldermore said the deal would enable it to expand its range of products.

Aldermore was founded in 2009 with the aim of challenging the big four High Street banks, which have been criticised for their dominant market shares.

The bank has about 230,000 customers, including borrowers and savers.

It has no physical branches, but operates online and on the phone. It is best-known for lending to small and medium-sized businesses.

FirstRand said it was planning to expand the range of services offered by Aldermore to include car finance and insurance.

The impending sale follows news earlier this year that investors in fellow challenger Shawbrook forced its board to recommend a £868m buyout from Pollen Street Capital and BC Partners.

And, in 2015, TSB’s brief existence as a challenger, split off from Lloyds Banking Group, ended after just a year, when shareholders in the newly-floated bank accepted a £1.7bn bid from Spain’s Sabadell.

But Aldermore’s chief executive, Phillip Monks, said the bank’s mission would remain unaltered.

“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,” he said.