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Shawbrook is targeting a valuation of up to £2bn in its initial public offering, delivering a shot in the arm for the London market with one of its biggest listings in years.
The specialist lender announced on Tuesday that it was aiming for a range of £1.8bn to £2bn in the float, confirming previous reporting by the Financial Times.
The transaction will allow Shawbrook to raise £50mn from selling existing shares and let its private equity backers, Pollen Street and BC Partners, sell down their stakes. The private equity duo first invested in Shawbrook, which specialises in lending to small and medium-sized companies, in 2017.
The shares will be priced at between £3.50 and £3.90, with final pricing due to be announced on October 30.
Shawbrook tried to float earlier this year, but the plan was derailed by the market turmoil triggered by Donald Trump’s trade tariffs.
Both Pollen Street and BC Partners were keen to resurrect the plans quickly, before the financial data and due diligence compiled became stale, the FT previously reported. Goldman Sachs and Barclays were advising on the float.
The owners also tried to either float or sell Shawbrook in 2022, but the surge in inflation squeezed its SME client base and scuppered the process.
Shawbrook is expected to use the cash from a listing to acquire competitors. The company has led 24 M&A deals and said last month that it was “well placed to lead further consolidation in the market given its active pipeline of potential M&A opportunities”. Sky News reported in April that Shawbrook and the fintech Starling had held early stage acquisition talks.
The float is the latest fillip for the London Stock Exchange, which has endured a dearth of floats and an exodus from its main market in recent years. Lower valuations has promoted a number of companies, most recently the money transfer fintech Wise, to move their primary listing to the US.
However, Shawbrook’s £2bn float is the main market’s largest in recent years, and comes as others also gear up for London listings. Princes Group, the canned food company, is planning for a London float at a £1.5bn valuation, while LED mask maker Beauty Tech Group also made its London market debut earlier this month.
