Spanish bank's offer likely to be accepted
TSB expected to fall to £1.7 billion bid approach from Spanish bank
A proposed offer at 340p per share from Spain’s fifth biggest bank comes less than a year after TSB was carved out of Lloyds and floated at 280p per share valuing the company at £1.3bn.
The TSB board said in a statement that “it would be willing to recommend an offer at the proposed price, subject to reaching agreement on the other terms and conditions of any offer.
“Accordingly, the board is in discussions with Sabadell in relation to these terms. The making of any offer for TSB by Sabadell will be subject to the completion of due diligence and Lloyds Banking Group agreeing to enter into an irrevocable undertaking with Sabadell in respect of its entire holding in TSB. 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.”
Sabadell is a strong competitor in its home market and has developed a successful international presence in the US. Sabadell believes that the current banking industry dynamics and macro-economic environment make the UK an attractive market for future investment.
Sabadell anticipates that under its ownership, TSB would be able to further enhance its growth strategy and efficiency, benefiting 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.
Sabadell has until 5pm on 9 April to either announce a firm intention to make an offer for TSB or walk away.