The prominent financier Jonathan Rowland is to take the challenger bank he co-founded six years ago onto the London stock market through a reverse takeover of another business set up by his family.
Sky News has learnt that Mr Rowland, who has floated a number of corporate vehicles in the City, has orchestrated a deal to combine Redwood Bank, a lender to businesses, with R8 Capital Investments, a cash shell.
Insiders said a reverse takeover of R8 by Redwood Bank was expected to be announced on Monday morning.
It is expected to seek in the region of £20m of new capital from investors as part of the deal, which is expected to be earmarked for the future growth of the bank.
R8 was previously known as Mode, which for a period traded as a cryptocurrency venture but which was effectively wound down earlier this year.
This weekend, City sources said that Mr Rowland had identified R8 as the ideal vehicle through which to take Redwood Bank public and enable it to acquire other lenders and loan books in order to diversify it into a full-service bank.
One analyst said Mr Rowland’s timing could prove opportune amid an expected wave of consolidation in the UK banking sector.
Higher interest rates have improved banks’ profitability, with the Co-operative Bank, Sainsbury’s Bank, Shawbrook and Tesco Bank all having been the subject of speculation about their future ownership during the last 12 months.
R8 currently has a market valuation of just over £2m.
Sources said the reverse takeover by Redwood Bank would be structured as a share-for-share exchange, which would give investors in Redwood Financial Partners a majority stake in the London-listed company.
Redwood Bank was the first partnership between the Rowland Family and other well-known investors, including David Bonderman, the co-founder of TPG, one of America’s biggest buyout firms and a former chairman of Ryanair Holdings.
Redwood and Mode were originally structured as part of the same company, but were divested before the bank was licensed by regulators in 2017.
Mr Rowland is the son of David ‘Spotty’ Rowland, who has in the past been a major Conservative Party donor.
The younger Mr Rowland led the restructuring of Kaupthing Bank Luxembourg, an Icelandic-owned entity which was hit by the banking crisis of 2008, into Banque Havilland, a global private bank.
Neither Mr Rowland nor the companies he is seeking to combine could be reached for comment.