CVC Prepares Aldermore Bid as FirstRand Plans Exit
CVC Capital Partners is preparing a potential offer for UK challenger bank Aldermore, adding to a growing list of bidders circling the lender as parent company FirstRand looks to exit the business, according to a report by Sky News.
CVC Timeline and Process
The private equity firm has reportedly been preparing for a possible transaction for several months and is expected to submit a proposal before a September deadline. Aldermore is owned by South Africa’s FirstRand, which announced in April that it intended to sell the UK lender.
The decision followed a sharp increase in provisions linked to the UK’s motor finance mis-selling scandal, with FirstRand setting aside £750m to cover anticipated costs, according to Private Equity Wire.
Other Bidders and Asset Split
CVC’s potential approach comes after several other financial institutions were linked to the sale. Lloyds Banking Group, Shawbrook and Metro Bank have all previously been reported as potential bidders, although Metro Bank is now understood to be unlikely to proceed.
The sale process could also allow bidders to target different parts of the business. Advisers are expected to give potential buyers the option of submitting separate offers for Aldermore’s banking operations and MotoNovo, its motor-finance division, according to Private Equity Wire.
Aldermore provides lending and savings products to individuals and small and medium-sized businesses, while MotoNovo is focused on vehicle finance.
CVC Strategic Angle
For CVC, a successful bid would represent another move into financial services and would give the buyout firm an opportunity to acquire a UK banking platform at a time when consolidation among specialist lenders is gathering pace, according to Private Equity Wire.
