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Spain's Sabadell rejects offer from Co-op bank for its British unit TSB

Spain's Sabadell rejects offer from Co-op bank for its British unit TSB
Spain's Sabadell rejects offer from Co-op bank for its British unit TSB   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Jesús Aguado</p> <p><span class="caps">MADRID</span> – Spain’s Sabadell said on Saturday its board has rejected an offer from Co-operative Bank for its British subsidiary <span class="caps">TSB</span>, after Sky News first reported about the approach.</p> <p>Sabadell confirmed in a statement that it had received a letter from Co-operative Bank outlining a proposed offer for <span class="caps">TSB</span>, but said its board had officially responded to Co-operative Bank that “this is not a transaction that we wish to explore at this moment as we have previously expressed publicly”.</p> <p>Sky News said Co-operative Bank had indicated to Sabadell that it would be willing to pay more than 1 billion pounds ($1.38 billion) to acquire control of <span class="caps">TSB</span>.</p> <p>A spokesperson for Co-operative Bank declined to comment on Sabadell’s statement or media reports.</p> <p>The Spanish bank did not mention any figure or potential valuation in its statement.</p> <p>A source with knowledge of the matter said that the board took its decision to reject the offer at the end of September.</p> <p>Sabadell’s 1.7 billion pound acquisition of <span class="caps">TSB</span> in 2015 ran into issues in 2018 when IT glitches sent costs spiralling.</p> <p>The Spanish lender had been planning to sell <span class="caps">TSB</span> and hired Goldman Sachs to help with the process, but its new Chief Executive Officer Cesar Gonzalez-Bueno has frozen the sale and is working on turning the bank around.</p> <p>Sources told Reuters in December that Britain’s mid-tier banks, also known as challenger banks as they seek to challenge the dominance of big high street lenders, were best placed to pursue a tie-up with <span class="caps">TSB</span> as they could extract synergies and IT efficiencies without cutting costs as much or undertaking a drastic restructuring of its branch network.</p> <p>Differences between Spanish lender <span class="caps">BBVA</span> and Sabadell over the value of <span class="caps">TSB</span> were partly to blame for merger talks breaking down in November last year, a source directly aware of the talks said then. </p> <p>Sky News said if a potential deal between Co-op and <span class="caps">TSB</span> did materialise, a tie-up between the two would create a high street lender with more than 8 million customers encompassing mortgages, current accounts, credit cards and savings products.</p> <p>($1 = 0.7272 pounds)</p> <p/> </div>