A high-ranking official in Donald Trump’s office is preparing a deal worth 700 million pounds, according to which one of the largest British digital banks alone will be quoted on the US stock market.
Sky News has learned that a special purpose vehicle (SPAC) created by Wilbur Ross, who was President Trump’s trade secretary from 2017 to 2021, is in detailed talks to merge with Atom Bank of Durham.
Sources in the banking industry said this weekend that discussions are at an advanced stage, although there was no guarantee that an agreement would be reached, especially amid stock markets that are plagued by rising inflation and growing fears of a recession.
However, if the deal is completed Atom Bank will make Atom Bank one of the most famous British companies to be published through SPAC, joining such as Cazoo, a digital platform for buying cars, and Vertical, an aerospace company founded by Stephen. Fitzpatyk, entrepreneur for Ovo Energy.
Under the terms of the prospective merger, Atom Bank will agree to merge with Ross Acquisition Corp II, SPAC, which is listed on the New York Stock Exchange last spring, according to an insider in the banking industry.
SPAC – a front company set up to find an existing business for the merger – will also raise around £ 150 million through the so-called PIPE (private equity investment).
Mr. Ross and his other founding shareholders SPAC were able to participate in the PIPE fundraiser.
The deal will take place in one of the most volatile stock market conditions over the years, and after a number of SPACs abandoned previously announced deals or were forced to return money to their original investors after failing to identify a deal.
If he announces a deal with Atom Bank, it will probably take about six months.
In 2010, WL Ross, Mr. Ross’s private equity firm, acquired a 21% stake in Virgin Money, shortly before it was transformed into a major player in the industry by buying much of the nationalized bank Northern Rock.
WL Ross sold its last shares of Virgin Money in 2016.
Mr Ross has been a well-known financier on Wall Street for decades, earning the nickname “King of Bankruptcy” for his reputation of buying troubled companies in the steel and coal industries and selling them for substantial profits.
As a senior figure in the Trump administration, Mr. Ross has helped shape the U.S. government’s approach to relations with China, the world’s most important bilateral trade relationship.
He was also a major shareholder in the Bank of Ireland and a number of American creditors.
Atom Bank has made little secret of its plans to hold a public listing in the coming years, although it was expected to appear in London, given that its business is entirely focused on the UK.
Since its inception in 2014, it has achieved less impressive successes than competitors such as Monzo, Starling Bank and, in particular, Revolut, whose value last year in the funding round was more than $ 30 billion.
Atom Bank has total customer deposits of more than £ 2.5 billion and has announced the completion of mortgages worth more than £ 3 billion, but has set ambitious targets to increase those figures in the coming years.
In total, it has raised about £ 500 million in capital from investors including Spanish bank BBVA, Toscafund and now liquidated Woodford Investment Management.
Last year, it attracted headlines, becoming one of the first major employers to switch to a four-day week.
It says that this step, which involves reducing working hours from 37 to 34 without affecting wages, was designed to support the mental and physical well-being of employees, as well as to increase productivity.
Announcing the £ 75 million round of financing, which valued it at £ 435 million in February, Mark Mullen, CEO of Atom Bank, said: “We have achieved a number of important financial milestones and maintained an excellent reputation among our clients.”
“Our investors are now supporting our continued growth. This capital will allow Atom to build on the progress we have made and continue to offer financial solutions to people who want to own a home, grow their own business and save for the future.
“This is also a fundamental next step on our path to an IPO.”
Responding to a request from Sky News via email, Mr Ross said his “practice has always been not to comment on rumors of transactions involving my investments”.
Atambank declined to comment.