12th Mar 2015 11:45
LONDON (Alliance News) - Lloyds Banking Group PLC Thursday said it would be "minded to accept" an offer of 340 pence per share for TSB Banking Group PLC, the FTSE 250 bank it floated on the London Stock Exchange last year, if Spanish lender Banco de Sabadell SA makes a formal takeover bid.
TSB shares shot higher on Thursday morning after the company confirmed it has received a preliminary takeover offer of 340 pence per share from Sabadell, valuing the lender at GBP1.70 billion.
TSB said its board has indicated to Sabadell that it would be willing to recommend an offer at the proposed price, subject to the pair reaching agreements on other terms and conditions of the offer, on which the board has now entered talks with Sabadell.
"Based on preliminary discussions, the Board of TSB believes that Sabadell could support and accelerate TSB's retail growth strategy and accelerate the expansion of TSB's presence in the SME sector," TSB said in a statement.
Lloyds Banking Group, which still owns 50% of TSB after beginning a divestment process with an initial public offering in June 2014 and following up with a subsequent share sale three months later, has until the end of 2015 to sell its remaining stake in TSB under European demands made as a condition of its state-backed bailout during the financial crisis of 2007-09.
"The group is in discussion with Banco de Sabadell SA regarding the terms of an irrevocable agreement and would be minded to accept an offer at this price if it is made, subject to reaching a satisfactory conclusion on the terms above," Lloyds said in a statement.
TSB had already said that any takeover offer made by Sabadell would require due diligence and backing from Lloyds.
Both TSB and Lloyds said there can be no certainty of a formal offer being made.
Sabadell is Spain's fourth largest bank by market capitalisation, behind giant Banco Santander SA, which has a sizeable UK unit, Banco Bilbao Vizcaya Argentaria SA and CaixaBank SA.
Citigroup and Rothschild are acting as financial advisers to TSB and Goldman Sachs is acting as financial adviser to Sabadell.
TSB shares are trading up by 26% at 332.11 pence late Thursday morning, easily the best performer in the FTSE 250 index. Sabadell shares were trading down 9.3% at EUE2.26 in Madrid.
By Sam Unsted; [email protected]; @SamUAtAlliance
Update by Samuel Agini; [email protected]; @SamuelAgini
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