Sabadell confirms offer from Co-operative Bank for TSB
The Co-operative Bank has expressed an interest in buying fellow UK mid-tier player, TSB. The latter is owned by Spain’s Sabadell, which has confirmed an approach and says it has rejected the move.
Sabadell acquired TSB for £1.7 billion in 2015
The Spanish bank stated: “This is not a transaction that we wish to explore at this moment as we have previously expressed publicly”.
Sky News initially reported the offer and said Co-op Bank had indicated to Sabadell that it would be willing to pay more than £1 billion to acquire control of TSB.
Co-op Bank has declined to comment on Sabadell’s statement or media reports. The Spanish bank did not mention any offer figure or potential valuation in its statement.
Reuters quotes a source close to the bank that said Sabadell’s board took its decision to reject the offer at the end of September.
Sabadell acquired TSB for £1.7 billion in 2015 but it has been a somewhat troubled few years that has included IT issues. Indeed, the Spanish bank had been planning to sell TSB, with Goldman Sachs appointed to support the process, but reversed the decision with the arrival of a new CEO.
In parallel, there were merger talks last year between Sabadell and BBVA but these broke down.
The Co-op Bank had originally tried to buy the TSB branch network in 2013 but the deal fell through after it emerged the Co-op had a £1.5 billion capital black hole. The troubled bank was subsequently majority acquired by hedge funds.
Earlier this year, US private equity heavyweights, Bain and JC Flowers, took equity stakes in the bank.
