Exclusive-Metro's biggest shareholder open to selling stake, sources say

By Amy-Jo Crowley and Charlie Conchie

LONDON (Reuters) -Colombian billionaire Jaime Gilinski Bacal is open to selling his majority stake in British lender Metro Bank and has received interest from investors, two people with knowledge of the matter said.

Gilinski, who sits on Metro's board as a non-executive director and who owns a 52.87% stake via his Spaldy Investments vehicle, has been considering options for his stake including a sale, after a rebound in the bank's share price, the people said. He became the majority shareholder after playing a critical role in its 325 million pound ($436 million) equity recapitalisation in 2023.

Private equity firms Pollen Street Capital and BC Partners together in recent weeks made an offer for Metro Bank, one of the people and a third one said. But they stopped their work after a disagreement on valuation and the board rejecting their offer, said the first person.

Another possibility for Gilinski could be a deal to grow Metro by merging it with another lender, one of the two people said. Gilinksi has said in the past that there were opportunities to grow the bank. All three people spoke on condition of anonymity because the matter is private.

Gilinski via a representative declined to comment. Metro Bank, BC Partners and Pollen Street Capital also declined to comment.

Any deal involving Metro Bank would follow a bounce in merger and acquisition activity among British lenders. Nationwide Building Society agreed to buy Virgin Money in March in a  2.9-billion-pound  all cash deal. Barclays also acquired the banking operations of supermarket group Tesco for about 600 million pounds.  

Metro Bank's shares have risen about 140% since a recapitalisation in October 2023, but remain far off the highs of 40 pounds per share in March 2018, according to LSEG data. Metro Bank shares closed at 125.8 pence a share on Thursday, giving the bank a market value of 844 million pounds.

An acquisition by Pollen Street and BC Partners could have led to a tie-up between Metro Bank and British specialist lender Shawbrook, one of the sources said. Shawbrook did not respond to a request for comment. Sky News first reported that Pollen Street had made an approach to Metro Bank. Reuters is reporting for the first time the involvement of BC Partners and the rejection of the bid.

Pollen Street and BC Partners own Shawbrook, which in 2023 weighed a bid to buy Metro Bank, Reuters reported at the time.

Metro Bank, launched in 2010 to battle Britain's incumbent lenders, returned to profit in the second half of last year after a string of setbacks in recent years, including accounting errors, leadership departures and delayed regulatory approval for capital relief measures.

In its full-year results, Metro said it expects return on tangible equity (ROTE) – a key metric of profitability – to grow in the mid to upper single digit percentage levels this year, and double digit in 2025.

Metro Bank is also expecting a boost to its bottom line over the next two years as over 2 billion pounds of its treasury investments mature and migrate onto higher yielding rates. In a call with analysts in February, executives said they expected the change to expand its net interest margin through 2026 and 2027, a key measure of bank profitability.

Analysts have said Metro Bank's prospects could be improved by long-awaited regulatory reform to how much capital mid-sized banks have to hold, but the timing and impact of such potential changes remains uncertain.

($1 = 0.7449 pounds)

(Reporting by Amy-Jo Crowley and Charlie Conchie in London, additional reporting Lawrence White; Editing by Anousha Sakoui and David Evans)