Banco Sabadell presents the takeover bid for TSB

Josep Oliu, the chairman of Banco Sabadell and Jaime Guardiola, the chief executive officer of the entity gave press conferences in London and Barcelona to explain to the media the takeover bid that Banco Sabadell has presented to acquire control of the entire shareholding of the British bank TSB. Both Josep Oliu and Jaime Guardiola have stated that the UK market is an attractive one, as it has a stable, well-defined regulatory framework, offers consists returns and has sound growth prospects, especially in the retail and small and medium enterprises market.

TSB Banking is currently a subsidiary of Lloyds Banking Group and holds sixth place in the ranking of British banks. With assets in excess of 34,000 million euros, it has a network of 631 branch offices across Scotland and England, a workforce of 8,600 staff and 4.6 million customers. By virtue of the agreement, the price agreed on to for the operation totals 1,700 million pounds (approximately 2,350 million euros).

The public offering of Banco Sabadell is 340 pence per share (approximately 4.70 euros per share) which signifies a premium of 29% compared to the price of TSB before the operation was announced. The operation enjoys the support of the current executive team of TSB which has advised its shareholders to accept the offer of Banco Sabadell.

If the operation is executed, Banco Sabadell will have taken a significant step forward in its strategic objective of expanding its business to other international markets, one of the planks of its Triple Strategic Plan 2014-2016. Thus, with the acquisition of TSB, Banco Sabadell would have 22% of its assets located overseas, as against the current 5%. Moreover, the experience acquired by Banco Sabadell from the seven integrations of banking entities carried out successfully to date, its broad experience in customer service, especially in personal banking and SMEs, will be key for generating major synergies.

As part of this operation, the Board of Directors of Banco Sabadell has approved a capital increase for an approximate sum of 1,600 million euros, with preferred subscription rights for the current shareholders of the bank. The new shares will be offered at a subscription price of €1.48, in a ratio of 3 new shares for every 11 current shares.

As explained by Josep Oliu and Jaime Guardiola, this capital increase will enable it to maintain the Banco Sabadell’s conservative capital position, with one of the highest ratios among Spanish banks.