Lloyds tipped as frontrunner to buy Aldermore in £1.4 billion deal

What Brokers Say Finance Written by: Ian Lyall 15:36 Fri 11 Sep 2026 --> Disclaimer No investment advice About this content Editorial Standards & Policies Share article About this content × About Ian Lyall Ian Lyall, a seasoned journalist and editor, brings over three decades of experience to his role as Managing Editor at Proactive. Overseeing Proactive's editorial and broadcast operations across six offices on three continents, Ian is responsible for quality control, editorial policy, and content production. He directs the creation of 50,000 pieces of real-time news, feature articles, and filmed interviews annually. Prior to Proactive, Ian helped lead the business output at the Daily... Read more About the publisher Proactive financial news and online broadcast teams provide fast, accessible, informative and actionable business and finance news content to a global investment audience. All our content is produced independently by our experienced and qualified teams of news journalists. Proactive news team spans the world’s key finance and investing hubs with bureaus and studios in London, New York, Toronto, Vancouver, Sydney and Perth. We are experts in medium and small-cap markets, we also keep our community up to date with blue-chip companies, commodities and broader investment stories. This is content that excites and engages motivated private investors. The team delivers news and unique insights across the market including but not confined to: biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto and emerging digital and EV technologies. Use of technology Proactive has always been a forward looking and enthusiastic technology adopter. Our human content creators are equipped with many decades of valuable expertise and experience. The team also has access to and use technologies to assist and enhance workflows. Proactive will on occasion use automation and software tools, including generative AI. Nevertheless, all content published by Proactive is edited and authored by humans, in line with best practice in regard to content production and search engine optimisation. Aldermore View Price & Profile Lloyds tipped as frontrunner to buy Aldermore in £1.4 billion deal Published: 15:36 11 Sep 2026 BST Lloyds Banking Group PLC (LSE:LLOY) is expected to be among the bidders for specialist lender Aldermore , with analysts at RBC Capital Markets valuing the target at around £1.4 billion and calling the deal financials "very compelling". FirstRand, the South African group that owns Aldermore, said in its full-year results that the sale process has begun, with non-binding offers due by the end of September and final binding offers by December. FirstRand put its UK division up for sale in April, and Sky News reported in June that Lloyds was exploring a takeover and preparing a possible bid. Lloyds has not commented. RBC analyst Benjamin Toms argues Aldermore is a good fit. The lender focuses on buy-to-let and motor finance, and Lloyds is keen to build its capabilities in a buy-to-let market increasingly dominated by professional landlords. The broker values Aldermore at £1.35 billion excluding its motor finance arm and £1.45 billion including it, using a model that compares peers' price to tangible book value against returns on equity, with a 40% takeover premium assumed. RBC estimates the acquisition would lift Lloyds' earnings per share by 5.3% including motor finance, or 3.9% without, generating a return on investment of 35% or 31% respectively. The appeal, it said, is driven by significant cost and funding synergies, with Aldermore able to tap Lloyds' cheaper deposit base. The analysis follows a Sky News report in July suggesting Aldermore could fetch £2 billion, a price at which the deal would still add 4.4% to earnings. Against that backdrop, RBC said the valuations of London-listed specialist lenders including Close Brothers, OSB, Paragon, Shawbrook and Metro Bank look cheap. The broker flagged two knock-on effects for those peers. A Lloyds purchase would remove one potential acquirer from the market, while pricing competition could intensify if Aldermore gained access to Lloyds' low-cost funding. RBC rates Lloyds 'outperform' with a 124p price target, against a current share price of 109p. It said motor finance, long an overhang for the bank through the Financial Conduct Authority's review of the sector, is "no longer part of the story". Continue reading