Shawbrook shares surge 8% on London debut
The stock gained 7.8% from the IPO price to £3.99 in early trading
Shares in British lender Shawbrook climbed 8% in early Thursday trade following London’s biggest initial public offering (IPO) by a UK-based company in two years.
The company priced its shares at £3.70 apiece, in the middle of a previously announced range of £3.50 to £3.90, valuing it at about £1.92 billion.
The stock gained 7.8% from the IPO price to £3.99 in early trading. It was last up 6% at £3.92.
The bank, owned by a vehicle controlled by private equity firms Pollen Street and BC Partners, sought to raise nearly £50 million by selling new shares, while its two private equity owners expected to raise nearly £298 million from the deal, according to its prospectus.
Shawbrook’s IPO comes after a barren period of new listings in Britain and an exodus of firms to overseas markets. London, which was Europe’s most popular venue for listings in the boom of 2021, has attracted only 2% of all European IPO volumes since January, Dealogic data shows.
The listing also marks a return to the public market for the bank after it was taken private by BC Partners and Pollen Street in 2017. The owners have also explored a number of deals with rival lenders in the past two years, including Metro Bank and Co-op Bank.
Shawbrook initially considered listing earlier this year, according to a person familiar with the matter, but markets were impacted by U.S. President Trump’s announcement of tariffs in April. European bank stocks have increased sharply since then, according to data from S&P Global.
The strong support we have received from investors across the UK, Europe and the U.S. reflects the strength of Shawbrook’s proposition and the business we have built, CEO Marcelino Castrillo said in a statement.
Shawbrook posted underlying profit before tax of £168 million in the first half of this year, up from £124.5 million in the same period last year.
It is planning to use part of the IPO proceeds to fund further acquisitions after striking 24 deals since 2011, according to its prospectus. In September, it announced the acquisition of lender ThinCats, which added nearly £700 million to its loan book.