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LONDON (Alliance News) - Secure Trust Bank PLC on Friday said it will look to leave London's AIM market for smaller companies in favour of a place on the Main Market for more established companies, as Arbuthnot Banking Group PLC loosens its hold on the challenger bank.
Secure Trust's statement came as Arbuthnot set out its intention to shrink its stake in the lender. Arbuthnot, also listed on AIM, later said it sold 6.0 million Secure Trust shares at 2,500 pence each. The pricing of the placing was as guided, and the sale generated GBP150 million for Arbuthnot, which sold slightly more than the 5.8 million shares initially intended.
Institutional investors bought the shares at an 11% discount to Secure Trust's closing price on Thursday. Arbuthnot's stake will fall from a 52% majority to a minority position of just under 19%. Arbuthnot also owns the Arbuthnot Latham private bank.
Shares in Secure Trust closed down 6.3% at 2,623.88p Friday. Arbuthnot shares closed up 3.6% at 1,541.68p.
Secure Trust wants to address is corporate governance structure as as part of its move to the Main Market, prompting Henry Angest, chairman and chief executive officer of Arbuthnot, to start looking for an independent non-executive chairman of Secure Trust, replacing himself as chairman.
Having completed the sale of Everyday Loans Group to Non-Standard Finance PLC in April, Secure Trust has been planning to pay a special interim dividend for 2016 of 165 pence per share. The bank, which is working to satisfy the conditions required to declare the dividend, said the new owners of the shares Arbuthnot sells would be entitled to receive the special payment.
The sale of the shares marks a shift for Arbuthnot, officially known as a fundamental change of business under AIM rules. Angest, who controls a 55% stake in Arbuthnot, plans to vote in favour of the sale of the company's shares in Secure Trust at a meeting called for June 14.
Arbuthnot said it had indicated when Secure Trust joined AIM in November 2011 that it would be willing to shrink its stake to help the retail lender grow.
"The growth of Secure Trust in the last four and half years has been substantial, and the company believes that now is the appropriate time to reduce its holding in Secure Trust to a non-controlling position, in order to broaden the range of strategic options available to Secure Trust," Arbuthnot said in a statement.
The money raised from the sale of its shares in Secure Trust will be used to grow the private and commercial banking business within Arbuthnot Latham & Co Ltd.
Stifel Nicolaus Europe Ltd, trading as Keefe Bruyette & Woods, is the sole bookrunner on the share sale, which is not underwritten.
Arbuthnot said it it does not intend to sell any further shares in Secure Trust for at least 180 days following completion, other than with the agreement of the bookrunner.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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