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Sabadell is seeking to sell the UK Bank TSB as Spanish lenders try to avoid a hostile approach of 11 billion euros from domestic rival BBVA.
Sabadell is working with an advisor to look into off-roading UK high street units and is in contact with potential bidders, those familiar with the issue told the Financial Times.
Two people said documents related to the sale had been distributed to potential bidders in recent weeks, while one added that stakeholders in the limited due diligence process, including data rooms, have been allowed.
Another said Sabadell began the process after receiving unsolicited interest in the TSB from multiple parties. Interested bidders were expected to submit offers this month, people added.
In response to the FT’s report, Sabadell said in a statement Monday evening that it received “preliminary non-binding representation for the acquisition of the entire TSB Bank Group share capital.”
“Banco Sabadell evaluates potential binding offers that may be received. … Any transaction is subject to the satisfaction of all legal obligations.”
Sabadell has acquired a TSB previously owned by the Lloyds Banking Group. In 2015, it acquired it from Spain for £1.7 billion for £1.7 billion as part of the “internationalization” and diversifying bank strategy.
However, lenders have been caught up in a pulled acquisition fight with the BBVA for more than a year, raising questions about TSB’s future.
The Spanish socialist-led government, which previously expressed opposition to the BBVA’s acquisition of Sabadell, submitted its bid to a full review by the Cabinet Minister last month.
The combination makes BBVA-Sabadell the second-largest player in the country’s loan market, jumping over Santander, but not at Caixabank’s level.
Potential bidders for TSB owned by Sabadell include Barclays, Natwest, Santander UK and HSBC. It is unclear which party approached Sabadell about the deal.
The TSB reported a profit of £285 million last year with pre-tax profit of £111.4 billion, with total assets of £46.1 billion at the end of 2024. The bank has around 5 million customers in the UK.
The TSB’s sales process is the latest attempt at trading in the UK banking industry, and was made after Santander recently refused a bid from British retail banks Natwest and Barclays, the FT previously reported.
The price Sabadell is seeking for the TSB was unknown, but one bank-savvy said the sale could potentially generate between £1.7 billion and £2 billion. TSB had a total stake of £2.1 billion at the end of last year.
Returning at least some of the proceeds from sales to shareholders could help protect them within the BBVA saga, another added.
Since its launch in May 2024, the hostile bid by the BBVA has become the most sickening takeover saga in Spain in a few years. Sabadel’s board initially rejected a friendly approach by the BBVA and rejected the Catalan business elite, where Sabadel has its roots.
Last month, the European Commission warned that the Spanish government had no authority to block BBVA bids. Prime Minister Pedro Sanchez’s Cabinet will need to decide until June 27th whether there is a reason to impose additional terms or restrictions on the transaction, besides the issue of competition.
Currently, Sabadell is subject to a purchase bid, so the board of directors is bound by a “passive obligation.” This means that any contracts reached regarding the sale of TSB must be submitted to shareholders for approval.
It is widely expected that banks will offload the TSB if BBVA succeeds in purchasing Sabadell.
