Jay Sidhu, the former chief executive of US lender Sovereign Bancorp, is setting up a special purpose acquisition company which is expected to raise $150m (€98.7m) through an initial public offering this year.

Sidhu, who left his 17-year tenure as chief executive and chairman of Sovereign Bancorp in October 2006, is planning to list Sidhu Special Purpose Capital Corp on the American Stock Exchange, and has lodged a filing with the US Securities and Exchange Commission. Bear Stearns is lead underwriter on the listing.