Background on Sabadell and BBVA
BBVA, a Spanish lender, launched a hostile takeover bid for Sabadell in May 2024. The initial offer, valued at approximately $14.22 billion, was rejected by Sabadell’s board of directors.
Sabadell, another Spanish banking group, owns TSB, a British retail and commercial bank. The value of TSB was one of the points of contention between BBVA and Sabadell, contributing to the failed merger talks in November 2020.
Sabadell Evaluating Preliminary Interest Statements for TSB
On Monday, Sabadell announced it had received preliminary, non-binding expressions of interest regarding the sale of its TSB unit and will assess any binding offers it may receive.
According to the Financial Times (FT), Sabadell is contemplating selling TSB as a countermeasure to BBVA’s hostile takeover attempt. The bank has been working with advisors to study the potential sale and has been in contact with possible bidders, per sources familiar with the matter.
Legal Requirements and Process
Spanish law mandates that the governing bodies of a target company remain passive and seek shareholder approval before taking any action that could hinder an acquisition. Sabadell acknowledged that “any transaction would be subject to satisfying all legal obligations,” without specifying potential buyers or valuation details.
The FT reported that documents related to a TSB sale have been distributed among potential bidders in recent weeks, with some parties granted limited due diligence access. Interested parties were expected to submit offers this month, according to the report.
Potential Benefits of Selling TSB
Returning some proceeds from a TSB sale to shareholders could help maintain their support amidst the BBVA takeover saga, according to one source cited by the FT.
Sabadell had previously postponed plans to sell TSB until the British bank recovers. In November 2020, Sabadell and BBVA abandoned merger discussions due to disagreements on terms, including price. The differing valuations of TSB played a role in the failed talks, as per sources with direct knowledge.
Key Questions and Answers
- What is the current situation with Sabadell and BBVA? Sabadell has received preliminary interest statements for its TSB unit amid BBVA’s hostile takeover bid. The Spanish bank is evaluating these expressions of interest and may sell TSB to counter BBVA’s attempt.
- Why is Sabadell considering selling TSB? Sabadell aims to maintain shareholder support and counteract BBVA’s hostile takeover bid by exploring the sale of TSB.
- What are the legal requirements for Sabadell to sell TSB? Spanish law requires Sabadell’s governing bodies to remain passive and seek shareholder approval before taking any action that could hinder BBVA’s acquisition. Any transaction must satisfy all legal obligations.
- What are the potential benefits of selling TSB? Returning some proceeds from a TSB sale to shareholders could help maintain their support during the BBVA takeover battle.
