BBVA to Continue Takeover Bid for Sabadell Despite Sale of TSB

BBVA is reportedly continuing its effort to take over Banco Sabadell, even after Sabadell decided this week to sell its U.K. unit, TSB.

Having determined that the move does not affect its own deal, BBVA could make a tender offer to Sabadell’s shareholders within weeks, Bloomberg reported Friday (July 4).

At the same time, BBVA has not made a final decision and could walk away from any deal, according to the report.

Analysts viewed Sabadell’s move to sell TSB as a way to increase its investors dividends and defend against BBVA’s bid, the report said.

BBVA has been maneuvering for a takeover of Sabadell for more than a year, per the report.

Sabadell announced in a Tuesday (July 1) press release that its board of directors decided to propose at a general shareholders meeting that it sell TSB to Banco Santander for 2.9 billion pounds (about $4 billion).

The company added that the proceeds from the sale would be used to fund an extraordinary cash dividend of 2.5 billion euros (about $2.9 billion) that would be paid to shareholders when the sale is completed.

“This transaction is beneficial for the Bank and its shareholders, as it creates significant value, allowing us to pay an extraordinary dividend while maintaining our capital ratio above 13%,” Banco Sabadell Chairman Joseph Oliu said in the release. “This transaction benefits our shareholders regardless of the outcome of the takeover bid.”

Oliu added that if the sale is approved at the general meeting, it will move ahead regardless of what happens with BBVA’s bid.

Santander also announced the proposed deal in its own Tuesday press release, saying that the acquisition would strengthen its position in the U.K. and that the company would integrate TSB in Santander UK, creating the third largest bank in the country in terms of personal current account balances.

It was reported June 27 that Sabadell was considering selling TSB to Santander or Barclays to avoid a hostile takeover by BBVA and that it was accepting offers through that day.

The Spanish government said June 24 that BBVA’s offer could go ahead as long as BBVA and Sabadell keep separate operations for between three years and five years.