Spain’s Banco Sabadell is in talks with UK lender TSB Banking Group about a possible takeover that values the bank at about £1.7 bn (€2.4bn), TSB has confirmed.
The preliminary proposal is for 340 pence in cash per TSB share.
Banco Sabadell’s offer will be subject to the completion of due diligence and Lloyds Banking Group plc. Any transaction would also be subject to regulatory approvals.
“Based on preliminary discussions, the board of TSB believes that Sabadell could support and accelerate TSB’s retail growth strategy and accelerate the expansion of TSB’s presence in the SME sector. Sabadell recognises the achievement of TSB’s management and employees and would continue to operate TSB as a robust competitor in the UK banking market, building on the TSB brand name,” a TSB statement said.
TSB also said that “Sabadell anticipates that under its ownership, TSB would be able to further enhance its growth strategy and efficiency, benefitting from Sabadell’s resources, experience gained in the Spanish banking market and SME lending as well as its track record of successful business and IT integrations. Sabadell believes that the two companies share similar values and customer commitment.”
The Spanish bank expects to finance the transaction on a capital neutral basis for the Sabadell group and that the transaction will be broadly neutral to Sabadell earnings in the short term and enhancing to earnings in the medium term.