South African lender FirstRand Bank is reportedly engaged in preliminary discussions to buy British challenger bank Aldermore for $1.4bn as it looks to build revenues beyond its home market.
The Berkshire-based bank has confirmed that it has got an indicative proposal from the Johannesburg-based lender regarding a possible cash offer.
However, the banks did not disclose any further details about the transaction or the exclusivity period duration.
“FirstRand has been assessing opportunities to build a sustainable long-term deposit franchise to fund its strategy to grow and diversify the revenues of its current U.K. business,” Aldermore said in a statement.
“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,” Aldermore concluded.
The negotiations are subject to due diligence, board recommendation and shareholder approval.
According to reports, if the preliminary talks turn out fruitful, it would result in a deal of $1.4bn.
Aldermore, founded in 2009 by a former Barclays executive with backing from private-equity firm AnaCap, has reported an increase in profits before tax last year as it provided more than £2bn in new mortgage lending.