It seems TSB can’t get enough of the warm bosom of a bigger parent. Just nine months after being hived off from Lloyds in an IPO, the bank said this morning that it was in takeover talks with mid-size Spanish lender Banco Sabadell.
The 340p-a-share offer would value TSB at £1.7bn, 28.5% above the 264.5p its shares closed at on Wednesday. Shares shot up accordingly this morning, soaring more than 26% to 333p.
Source: Yahoo Finance
Sabadell has already gone on a charm offensive to Lloyds, which still owns a 50% stake in TSB and sold its own Spanish division to Sabadell two years ago in return for a 1.8% stake in the bank (then worth around £72m). And it looks like the parent, which saw its own shares rise as much as 2% this morning, is willing to let its offspring fly the nest (it has to offload its stake by the end of this year anyway).
Looks like deal done. Sources tell me that Lloyds - 50% owner of TSB - will back Banco Sabadell £1.7bn offer for TSB— Kamal Ahmed (@bbckamal) March 12, 2015
‘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,’ TSB said in a statement. ‘Sabadell believes that the two companies share similar values and customer commitment.’
But before anyone gets gooey-eyed over the corporate love oozing out of that management speak, there could be a spanner in the works: Sabadell’s investors. The bank’s shares fell 7.5% to €2.30 (£1.63), probably because shareholders were spooked at the likely prospect of Sabadell having to raise more capital to fund the acquisition, and were suspended at around 10am British time.
It’s not clear yet whether that suspension will scupper the deal entirely, but it would be rather ironic if the newly-independent TSB were to leap into a fire so soon after leaving the frying pan of big, bad banking.