The boards of Banco de Sabadell and TSB Banking Group plc have reached agreement on TSB’s acquisition by the Spanish bank.
Sabadell has also agreed to acquire a 9.9% interest in TSB from Lloyds Bank, and Lloyds has entered into an irrevocable undertaking to accept the offer in respect of its entire remaining 40.01% shareholding in TSB.
Under the terms of the offer, TSB Banking Group plc shareholders will receive 340 pence per share in cash for each TSB share, which values the entire issued share capital of TSB at approximately £1.7 billion.
Sabadell says it expects to support and accelerate TSB’s retail growth strategy and accelerate the expansion of TSB’s presence in the SME sector, building on the TSB brand name.
Following completion of the offer, Paul Pester and Darren Pope of TSB have agreed to continue in their current roles. Pester will also join the Management Executive Committee of Sabadell Group on completion. Will Samuel has agreed to remain as the independent chairman of TSB following completion of the offer.
Sabadell currently anticipates that the board of TSB would include, in addition to the independent chairman, two executive directors (being Pester and Pope), three directors to be appointed by Sabadell and three independent non-executive directors.
Josep Oliu Creus, chairman of Sabadell, said: “We see the UK as an attractive market with a strong regulatory framework, sound macroeconomic fundamentals and exciting prospects for growth. TSB is a well-established brand which shares our culture of focusing on our customers and local communities. We believe that our experience of growing SME lending, our resilient and tested IT platform and our commitment to innovation will speed up TSB’s expansion so that it fulfils its potential as a strong and effective challenger to the traditional UK banks, without any of their legacy issues.”
Will Samuel added: “Since the IPO, TSB has pursued a strategy focused on growing its share of personal current accounts, accelerating asset growth through re-entering the intermediary mortgage channel and providing the kind of banking that people want.
“The offer from Sabadell represents a significant endorsement of TSB’s progress since its IPO and provides TSB shareholders the opportunity to receive today in cash the value that would otherwise be unlocked over time as TSB executes its strategy.”
Lloyds will provide £450 million in support to deliver the migration of the IT transitional services currently provided by Lloyds onto Sabadell’s Proteo platform.
António Horta-Osório, group chief executive of Lloyds Banking Group plc, said: “I am delighted to confirm we have agreed terms for the sale of our remaining stake in TSB to Sabadell. This is a significant and positive step for the Group and will enable us to meet our commitments to the European Commission, well ahead of its mandated deadline.”