TSB share price opens higher as Lloyds accepts £1.7bn takeover offer from Banco de Sabadell
Shares in TSB opened 1.6 per cent higher at 332.47p this morning after its majority owner, Lloyds, have accepted a £1.7bn takeover offer from Spanish rival Banco de Sabadell.
Shares in the challenger bank leapt 27 per cent last week, after TSB issued an announcement suggesting it was "willing to recommend" Sabadell's 340p-per-share offer – a premium of around 30 per cent.
Under the terms of the deal, Sabadell will buy 9.99 per cent of the bank currently owned by Lloyds for £170m next week, with an "irrevocable undertaking" to buy the rest of its 40 per cent stake at a date in the future.
The deal is more than twice the £750m offered by the Co-operative when it came close to buying the bank in 2012 – although TSB had a lucky escape when the Co-op suddenly pulled out after several weeks of talks. Months later, it unveiled a £1.5bn black hole in its balance sheet.
Part of TSB's enthusiasm for the offer comes from Sabadell's willingness to "to support and accelerate TSB's retail growth strategy and accelerate the expansion of TSB's presence in the [small business] sector". Since it was spun-off from Lloyds in 2013, TSB chief executive Paul Pester has focused on retail and small business lending, shying away from launching an investment arm.