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Sabadell is considering selling its British bank TSB as it tries to ward off an €11bn hostile bid from BBVA, its Spanish rival. According to sources familiar with the matter, Sabadell is working with advisors to explore the possibility of offloading its UK high street unit and has reached out to potential buyers.
Documents related to the sale have been circulated to interested parties, and some have been given access to a limited due diligence process. The decision to sell TSB comes after Sabadell received unsolicited interest from multiple parties.
Sabadell acquired TSB from Lloyds Banking Group in 2015 for £1.7bn as part of its strategy to diversify internationally. However, the bank has been embroiled in a takeover battle with BBVA for over a year, raising concerns about the future of TSB.
The Spanish government, which had previously opposed BBVA’s takeover of Sabadell, recently subjected the bid to a full review by cabinet ministers. If successful, the merger would create the second-largest player in Spain’s loan market.
Potential bidders for TSB could include Barclays, NatWest, Santander UK, and HSBC. TSB reported pre-tax profits of £285mn last year on income of £1.14bn, with total assets of £46.1bn. The bank has around 5 million customers in the UK.
The sale of TSB is part of a broader trend of dealmaking in the UK banking industry. Santander recently rejected bids from NatWest and Barclays for its UK retail bank. Sabadell is reportedly seeking a sale price between £1.7bn and £2bn, with the possibility of returning proceeds to shareholders.
BBVA’s hostile bid for Sabadell has faced opposition from the bank’s board and business leaders in Catalonia. The European Commission has warned the Spanish government against blocking the bid, giving them until June 27 to decide on additional conditions.
If BBVA successfully acquires Sabadell, it is expected that TSB would be sold off. Sabadell has not commented on the potential sale of TSB.
Please note that the information provided is based on sources familiar with the matter and should be treated as speculation until confirmed by official statements.
