Spain's Sabadell to offer TSB USD2.6b takeover bid

British challenger bank TSB has received a takeover approach from Banco Sabadell, valuing the business at about USD2.6 billion and sending its shares soaring by nearly a quarter, Gulf Time reported.

TSB said such a move would accelerate its growth prospects and help it compete with bigger rivals. Sabadell, Spain's fifth-biggest bank, has made a proposal of 340 pence in cash for each TSB share, subject to reaching agreement on the terms and conditions of an offer, and talks are continuing.

TSB, Britain's seventh-biggest lender, said it would recommend the offer to shareholders. The approach represents a 29 percent premium on Sabadell's closing price of 264.1 pence on Wednesday.

The sale would enable Lloyds Banking Group to dispose of its remaining 50% stake in the business, which it was ordered to sell by European regulators as a condition of its USD30 billion government rescue during the financial crisis of 2007-9.