Plans for the £1.7 billion takeover of lender TSB have been unveiled in a deal set to increase Spain’s interest in the UK banking sector.
The proposal from Barcelona-based Sabadell comes less than a year after TSB rejoined the London stock market in a split from Lloyds Banking Group.
TSB said its board was minded to back Sabadell’s 340p-a-share offer and added that new ownership would help accelerate TSB’s growth strategy, particularly in small business lending.
Lloyds, which still owns 50 per cent of TSB and has been told to dispose of the remaining stake this year, said it was supportive of the takeover move.
The proposed price will provide a swift profit for the 60,000 ordinary retail investors who took part in TSB’s 260p-a-share flotation last June.
It will also boost Spain’s hold on UK banking after Santander’s acquisition of Abbey, Alliance & Leicester and parts of Bradford & Bingley.
Sabadell, Spain’s fifth largest bank, pledged to keep the TSB brand name and create a “robust competitor” in UK banking.
TSB said Sabadell would draw on its experience in the Spanish banking market and in small and medium-sized business lending.
Its statement added: “Sabadell believes that the two companies share similar values and customer commitment.”
TSB has 8,600 staff, operates 631 branches and serves 4.5 million customers.
It recently reported annual profits of £170m and said 8.4 per cent of all people switching or opening a bank account last year chose TSB.
Founded in Barcelona in 1881, Sabadell operates through several different brands and employs 17,500 people across 2,320 branches.