Aldermore recommends £1.1bn takeover by FirstRand

Aldermore Group looks set to be acquired in a £1.1bn takeover after an offer was recommended to the shareholders of the listed challenger bank.

It today confirmed that its board and Aldermore's had agreed on the final terms of that offer, at a price of 313p per share.

FirstRand's 313 pence per share offer represents a 22.3 percent premium to Aldermore's closing price of 245 pence on October 12, the day before the companies announced they were in talks.

FirstRand said it aims to diversify Aldermore's proposition in the United Kingdom, with the possible addition of services such as auto financing, personal loans and insurance.

Aldermore Group's board said it recommended that shareholders support the offer.

FirstRand chief executive Johan Burger said the deal would build shareholder value by diversifying its United Kingdom business.

It will allow the FirstRand Group to allocate more financial resources to our operations in Africa, whilst diversifying earnings in the UK.

"Ongoing delivery against our strategic and financial targets extends our track record of performance and provides us with continued confidence in our future prospects", said Monks.

"With the backing of FirstRand Group's considerable resources and wider capabilities, we will be able to accelerate the delivery of our strategy and further expand the products and services we offer customers".

The offer from FirstRand, which said the acquisition would provide the platform to fulfil its growth objectives in the United Kingdom, values Aldermore at approximately £1.1bn. "Our vision has always been to bring more competition to United Kingdom banking, and the support of the FirstRand Group will enable us to continue to do just that".

The announcement came as Aldermore released a trading update for the third quarter of the year reporting that net loans have risen by 12 per cent to £8.4 billion compared to £7.5 billion the previous year driven by £2.4 billion of new lending.

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

FirstRand has been looking to return to developed markets following a rethink of its strategy prompted by slowing growth and rising risks elsewhere in Africa.

"In making this offer FirstRand carefully considered how current and potential macroeconomic future scenarios in the United Kingdom could impact the broader business".

Overseas buyers have announced more than $11 billion (£8.4 billion) worth of investment into United Kingdom financial services so far this year, according to Thomson Reuters data, compared with $12 billion in the same period last year and a $15 billion average over the last decade.

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