SPANISH high-street entity Banco Sabadell has agreed a takeover price for the British bank TSB at £1.7 billion (just under €2.35bn).
The Catalunya-based financial firm, which bought out the CAM bank three years ago, has confirmed in a letter to the UK stock market that TSB shareholders will receive £3.40 per share.
To finance the purchase, Banco Sabadell will raise additional capital of €1.6bn - although the takeover is not dependent upon an increase in assets - and that the offer has the support of TSB's board of directors, which has recommended its shareholders agree to the deal.
Banco Sabadell has negotiated with Lloyds, recently split from TSB, the acquisition of 49,999,999 of TSB's shares, or about 9.99% of its share capital.
Lloyds has agreed to bindingly accept the offer for its own shares in TSB, around 40.01%.
The entity has also offered Banco Sabadell the option to buy up to a maximum of 100 million of its TSB shares which make up 20% of the latter's capital.
Just two hours after the news broke, shares in Banco Sabadell went up 3%, standing at just under €2.27 each by 10.18hrs on Friday.
TSB's own shares rose by 2.44% within minutes of the announcement, to £3.35.
Initial reports suggest TSB shareholders are likely to vote in favour of the takeover.
