One of Britain’s biggest buy-to-let property lenders is in talks to take over a £600m specialist real estate finance group in the latest sign of challenger banks’ efforts to find new sources of growth.
Sky News has learnt that Paragon Banking Group has begun exclusive negotiations to buy Titlestone Property Finance from the giant private equity firm Oaktree.
The deal, which is being handled by the corporate finance firm Quayle Munro, is expected to cost Paragon tens of millions of pounds, according to a person close to the talks.
Titlestone has a balance sheet of roughly £600m.
If the deal is completed, it would be one of Paragon’s largest recent acquisitions and come soon after it completed a £725m mortgage securitisation – its largest since 2008.
Titlestone was established in 2012, providing development finance to the property industry across southern England.
Since then, it has extended more than £2bn of funding to more than 300 separate projects.
The company’s potential sale to Paragon underlines the banking group’s continued diversification as the specialist lending sector tries to identify new sources of growth.
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Paragon, run by Nigel Terrington, has a market value of nearly £1.4bn, with its shares up by about 12% over the last year.
A spokeswoman for Paragon declined to comment on Monday.