TSB is set to fall into Spanish hands after the UK challenger bank said it was prepared to back a takeover offer valuing the business at £1.7bn.
The proposal from Banco de 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 its ownership would help accelerate TSB’s growth strategy.
In a market note issued this morning the boards of TSB and Sabadell responded to mounting speculation.
The note said: “The board of TSB confirms that it has received a preliminary proposal from Sabadell which may or may not result in a formal offer for the entire share capital of the company.
“The board of TSB has indicated to Sabadell 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 plc 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.”
TSB said it believes that Sabadell could support and accelerate the firm’s retail growth strategy and accelerate the expansion of its presence in the SME sector.