A senior figure in Donald Trump’s cabinet is preparing a £700m deal that would see one of Britain’s biggest digital-only banks listed on the US stock exchange.
Sky News has learned that a Special Purpose Acquisition Company (SPAC) set up by Wilbur Ross, who was President Trump’s Commerce Secretary between 2017 and 2021, is in detailed talks on a merger with Durham-based Atom Bank.
Banking industry sources said over the weekend talks were at an advanced stage, although there was no guarantee a deal would be struck, especially amid soaring equity markets. inflation and growing fears of recession.
If struck, however, a deal would make Atom Bank one of the biggest UK companies to go public via a SPAC, joining Cazoo, the digital car-buying platform, and Vertical, the aerospace company founded by Stephen. Fitzpatrick, the entrepreneur behind Ovo Energy.
Under the terms of the proposed merger, Atom Bank would agree to merge with Ross Acquisition Corp II, a SPAC listed on the New York Stock Exchange in the spring of last year, according to a banking insider.
SPAC – a front company launched with the aim of finding an operational business to combine with – is also reportedly raising around £150m through a so-called PIPE (private equity investment).
Mr. Ross and his other founding shareholders of SPAC could choose to participate in this PIPE fundraiser.
A deal would take place in one of the most volatile stock market environments in years, and after a series of SPACs either abandoned previously announced deals or were forced to return money to their original investors after failed to identify a deal.
If he announces a deal with Atom Bank, it would probably take about six months to complete.
In 2010 WL Ross, Mr Ross’s private equity firm, took a 21% stake in Virgin Money, shortly before it became a major player in the industry by buying out much of the nationalized bank Northern Rock.
WL Ross sold the last of its Virgin Money shares in 2016.
Mr Ross has been a top financier on Wall Street for decades, earning the moniker ‘King of Bankruptcy’ for his track record of buying up troubled companies in the steel and coal industries and selling them. sale for significant profits.
As a senior Trump administration official, Mr. Ross helped shape the U.S. government’s approach to relations with China – the world’s most important bilateral trading relationship.
He was also a large shareholder in Bank of Ireland and several American lenders.
Atom Bank has made no secret of its intention to pursue a public listing in the coming years, although one would have expected it to float in London given that its business is entirely UK-focused. .
Since its inception in 2014, it has made less dramatic progress than rivals such as Monzo, Starling Bank and, in particular, Revolut, which was valued at over $30 billion in a funding round last year. .
Atom Bank has total customer deposits of over £2.5bn and has announced mortgage completions of over £3bn, but has set ambitious targets to increase these figures in the years to come.
In total, it has raised around £500m from investors including Spanish bank BBVA, Toscafund and now-dissolved Woodford Investment Management.
Last year it made headlines by becoming one of the first major employers to switch to a four-day week.
He said the move, which included a reduction in working hours from 37 to 34 hours with no impact on wages, was designed to support the mental and physical well-being of employees, as well as increase productivity.
Announcing a £75m funding round which valued it at £435m in February, Atom Bank Chief Executive Mark Mullen said: “We have achieved a number of financial milestones importance and maintained our excellent reputation with our customers.”
“Our investors are now supporting our continued growth. This capital will allow Atom to build on the progress we have made and continue to provide financial solutions for people who want to become homeowners, grow their own businesses and save for the future.
“This is also a fundamental next step in our journey to IPO.”
Responding to an email request from Sky News, Mr Ross said his ‘practice has always been not to comment on rumors of dealings involving my investments’.
Atom Bank declined to comment.
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