TSB owner Sabadell hit with hostile £10.5bn takeover bid from Spanish bank BBVA

09 May 2024 , 14:28

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A TSB bank on Cheapside, London. TSB owner Sabadell has received a hostile takeover bid from fellow Spanish bank BBVA (Image: PA Archive/PA Images)

Spanish banking giant BBVA has made a hostile takeover bid worth a 12.23 billion euros (£10.5billion) for TSB's parent company, Sabadell.

BBVA is bypassing the board and taking its offer straight to the shareholders of its Spanish competitor after Sabadell's directors refused the same deal earlier this week. On Monday, the two firms confirmed the approach when BBVA declared it had "no room" to increase its offer for Sabadell, which already values itself more highly than its share price value at the end of April.

However, Sabadell swiftly said it had rejected a potential takeover offer which would create one of the largest banking giants in Europe. Sabadell's board scrutinised the offer but concluded it "significantly undervalues the potential of Banco Sabadell and its standalone growth prospects".

They also flagged concerns about BBVA's recent share price "volatility", adding an extra layer of doubt over the proposal's true worth. On Thursday, BBVA presented the bid directly to Sabadell's shareholders, hoping to drum up enough backing to get enough support to push the deal through.

Carlos Torres Vila, BBVA's chairman, said: "We are presenting to Banco Sabadell's shareholders an extraordinarily attractive offer to create a bank with greater scale in one of our most important markets. Together we will have a greater positive impact in the geographies where we operate, with an additional 5 billion euro (£4.3 billion) loan capacity per year in Spain."

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In the UK, Sabadell owns TSB after buying the high street lender for around £1.7billion in 2015. On Wednesday, TSB revealed plans to close 36 UK branches and cut 250 jobs across the business.

Lawrence Matheson