British high street lender TSB Banking Group has confirmed that it had received a preliminary takeover offer from Spain’s Banco Sabadell.
Sabadell has proposed to pay £3.40 in cash for each share of TSB, valuing the company at £1.7bn, or about $2.6bn.
If the deal materializes, it will expand Sabadell’s presence in Britain, where it primarily offers business accounts and banking services to Spanish companies.
The transaction is expected to be broadly neutral to Sabadell earnings in the short term while accruing to earnings in the medium term.
TSB in a statement said: "Based on preliminary discussions, the board of TSB believes that Sabadell could support and accelerate TSB’s retail growth strategy and accelerate the expansion of TSB’s presence in the SME sector."