British challenger bank TSB has received a takeover approach from Spain’s Banco Sabadell.
The offer from Spain’s fifth biggest bank values the firm at around 2.5 million euros. Shares in TSB rose sharply, and were up 26 percent at 333.255 pence at 1040GMT.
Sabadell has made a proposal of 340 pence in cash for each TSB share, subject to reaching agreement on the terms and conditions of an offer, and talks are continuing. TSB, Britain’s seventh-biggest lender, said it would recommend the offer to shareholders.
The sale would enable Lloyds Banking Group to dispose of its remaining 50 percent stake of the business, which it was ordered to sell by European regulators as a condition of its 30-billion euro government rescue during the financial crisis of 2007-9.
It would also demonstrate the attractiveness of new British banks to foreign investors looking for exposure to Britain’s economic recovery through lenders untainted by the misconduct issues which have hampered Britain’s biggest banks.
Sabadell is planning to diversify by expanding overseas to offset sluggish growth in its home market, which is in the early stages of recovery following a deep recession.
TSB said it believed Sabadell could support and accelerate its growth in personal banking and help it expand its small business lending. It currently has only a 4.3 percent share of the personal current account market in Britain.
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