PRA gives green light for 'hostile takeover' of TSB

Spanish bank BBVA has secured approval from the UK's Prudential Regulation Authority to take indirect control of TSB, a subsidiary of fellow Spanish bank Banco Sabadell.

Sabadell rejected a previous €12.2bn takeover bid from BBVA in May this year, however BBVA’s shareholders later approved the integration in July and BBVA now plans to take the offer directly to Sabadell shareholders. BBVA has also received the green light from authorities of several countries where Banco Sabadell has a presence, including the United States, France, Portugal and Morocco.

In response, Sabadell wrote to its shareholders about the "hostile public takeover bid that BBVA has put in", stating that it was "submitted without prior agreement with [its] board of directors”.

Authorisation from the PRA is a necessary step to complete the takeover, since TSB would become part of BBVA.

Before BBVA makes a full offer to Sabadell shareholders, the bid also needs authorisation the European Central Bank, the Spanish Securities Market Commission and the Spanish competition regulator, along with a majority (at least 50.01%) of Sabadell shareholders.

In communication to shareholders in July, Banco Sabadell said: "You will be given the opportunity to make a decision on the takeover bid when the acceptance period opens. It is not yet known when this will take place, however, due to the complexity of the ongoing regulatory procedures, it is estimated that it could be at the end of 2024 or perhaps even 2025.

"At the beginning of the acceptance period, Sabadell's Board of Directors will issue a report assessing BBVA's bid and expressing their recommendation to Banco Sabadell shareholders. In order to make this possible, and to provide Banco Sabadell shareholders with sufficient information to make an informed decision, the Board expects BBVA to have published clear, transparent and comprehensive information on all aspects of the bid that may have an impact on the value of the offer."