Spanish bank’s £1.7bn bid for TSB boosts other challengers
CHALLENGER banks’ shares rose yesterday as the sector got a boost from Spanish bank Sabadell’s bid to acquire TSB.
Sabadell is in talks to buy TSB for 340p a share, valuing the bank at £1.7bn, compared with a float price of 260p and a trading price before the announcement of 264p.
TSB’s shares rocketed to 326p yesterday.
The challenger bank floated on the stock market less than a year ago, as Lloyds sold off the unit. Lloyds has to sell its remaining 50 per cent stake by the end of this year, and so the Sabadell bid is set to give it an unexpectedly high price for the stock.
The impact spread across the sector – shares in Virgin Money rose 1.93 per cent on the day.
And analysts said the deal should give RBS a boost when it sells off Williams and Glyn – the bank it has been ordered to sell off, in a parallel move to Lloyds’ sale of TSB.
TSB had been trading at a discount to its book value, and the £1.7bn valuation means it would sell at a premium.
“Williams and Glyn could look at an IPO at one-times book value, so this is positive,” said Arun Melmane at Canaccord Genuity, estimating that figure at as much as £1.5bn.