Aldermore Bid Part Of Growth Strategy, FirstRand Says

On the up Aldermore shares rocket

On the up Aldermore shares rocket

South African financial services company FirstRand Ltd on Friday confirmed its GBP1.08 billion bid for United Kingdom listed retail bank Aldermore Group PLC and said that the deal would enhance growth and diversify revenue generation.

The business said it has received an indicative proposal from FirstRand regarding a possible offer at 313 pence per ordinary share in cash.

"(The) Board of Aldermore has indicated to FirstRand that it is likely to recommend a firm offer at this (313 pence) level", it said in a statement. An offer at the proposed price would represent a 22.2 percent premium to Aldermore's share close on Thursday.

Shares in Aldermore were trading 18% higher at 302.80p on the back of the news. FirstRand has until November 10 to make a firm acquisition offer for Aldermore in accordance with United Kingdom takeover rules.

The group - which lends to small and medium-sized businesses, home-owners and landlords - saw mortgage lending increase by 9% to £6.2 billion.

FirstRand said in a statement that it has been on the lookout for a "long-term deposit franchise" to fund its strategy to grow and diversify its United Kingdom revenues.

"There can be no certainty that any firm offer will be made".

"The possible acquisition of Aldermore, with its unique operating model, market positioning and strength in deposit taking, would provide the ideal platform for FirstRand to fulfil this strategy on an accelerated basis", the group added.