Spain’s Sabadell said that its board has rejected an offer from Co-operative Bank for its British subsidiary TSB. This is after Sky News first reported about the approach. Sabadell confirmed in a statement that it had received a letter from Co-operative Bank. By outlining a proposed offer for TSB, said its board had officially responded to Co-operative Bank that this is not a transaction that they wish to explore at this moment. Because they have previously expressed publicly.
Sky News said that Co-operative Bank had indicated to Sabadell that it would be willing to pay more than 1 billion pounds to acquire control of TSB. A spokesperson for Co-operative Bank declined to comment on Sabadell’s statement. The Spanish bank did not mention any figure or potential valuation in its statement. A source with knowledge of the matter said that the board took its decision to reject the offer. Sabadell’s 1.7-billion-pound acquisition of TSB in 2015 ran into issues in 2018, this is when IT glitches sent costs spiraling. The Spanish lender had been planning to sell TSB and hired Goldman Sachs. This is to help with the process, but its new Chief Executive Officer Cesar Gonzalez-Bueno has frozen the sale. He is also, working on turning the bank around.
Sources told that Britain’s mid-tier banks, also known as challenger banks. This is because they seek to challenge the dominance of big high street lenders. They were best placed to pursue a tie-up with TSB as they could extract synergies and IT efficiencies. This is by without cutting costs as much or undertaking a drastic restructuring of its branch network. Differences between Spanish lender BBVA and Sabadell over the value of TSB were partly to blame for merger talks breaking down in November last year. Sky News said that if a potential deal between Co-op and TSB did materialise, a tie-up between the two would create a high street lender with more than 8 million customers encompassing mortgages, current accounts, credit cards and savings products.
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