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Sabadell is exploring a sale of its British bank TSB, as the Spanish lender seeks to fend off an €11bn hostile approach from its domestic rival BBVA.
Sabadell is working with advisers to examine offloading the UK high street unit and has been in contact with potential bidders, people familiar with the matter told the Financial Times.
Two of the people said that documents relating to a sale had been circulated to potential bidders in recent weeks, with one adding that interested parties had been granted access to a limited due diligence process, including a data room.
Another person said that Sabadell had kicked off the process after it received unsolicited interest in TSB from multiple parties. Interested bidders were expected to submit offers this month, the people added.
Sabadell acquired TSB, which was formerly owned by Lloyds Banking Group, in 2015 for £1.7bn as part of the bank’s then strategy to “internationalise” and diversify away from Spain.
However, the lender has been caught up in a drawn-out takeover battle with BBVA for more than a year, raising questions about the future of TSB.
Spain’s Socialist-led government, which previously voiced opposition to the takeover of Sabadell by BBVA, last month subjected that bid to a full review by cabinet ministers, the latest setback to its attempt to unite two of the country’s largest banks.
A combination would make BBVA-Sabadell the second-biggest player in the country’s loan market, leapfrogging Santander but falling short of CaixaBank.
Potential bidders for Sabadell-owned TSB could include Barclays, NatWest, Santander UK and HSBC. It is unclear which parties approached Sabadell about a deal.
TSB last year reported pre-tax profits of £285mn on income of £1.14bn, and had total assets of £46.1bn at the end of 2024. The bank has about 5mn customers in the UK.
The sale process for TSB is the latest attempt at dealmaking in Britain’s banking industry and comes after Santander recently rejected bids from NatWest and Barclays for its UK retail bank, the FT previously reported.
It was unclear what price Sabadell is seeking for TSB, but one person familiar with the bank said a sale could generate between £1.7bn and £2bn. TSB had total equity of £2.1bn at the end of last year.
Returning at least some of the proceeds of a sale to shareholders could help keep them onside amid the BBVA saga, another person added.
Since its launch in May 2024, BBVA’s hostile bid has become Spain’s most ill-tempered takeover saga in years. It is opposed by Sabadell’s board, which initially rejected a friendly approach by BBVA, as well as the business elite in Catalonia, where Sabadell has roots.
Last month, the European Commission warned the Spanish government that it does not have the power to block BBVA’s bid. Prime Minister Pedro Sánchez’s cabinet has until June 27 to decide whether there are reasons other than competition issues to impose additional conditions or restrictions on the deal.
Because Sabadell is currently the subject of a takeover bid, its board of directors is bound by a “duty of passivity”, meaning that any agreement reached regarding a sale of TSB would need to be submitted to shareholders for approval.
If BBVA is successful in its takeover of Sabadell, it is widely expected that the bank would look to offload TSB.
Sabadell declined to comment.