From a tortuous purchase to a key takeover bid: Sabadell bids farewell to TSB

MadridWho would have told Banc Sabadell that the acquisition of TSB would end up becoming one of the keys to another acquisition fifteen years later? However, in this case, the Vallesan bank is not the buyer, but the entity targeted by another bank: BBVA. This Thursday, in the midst of BBVA's hostile takeover bid, Sabadell shareholders are convened for a general meeting to vote on the sale of the British subsidiary TSB to Banco Santander for €3.1 billion. "The atmosphere will certainly be positive. Those convinced [by Sabadell's strategy] will attend the meeting," says a minority shareholder.

The exit from the United Kingdom, where Banc Sabadell landed in 2015, is accompanied by an extraordinary dividend of €2.5 billion, which shareholders will also have to ratify at a second meeting to be held after the first. The vote is expected to be overwhelmingly in favor of selling TSB and distributing the dividend, according to financial sources. For Sabadell, despite the summer schedule favoring the online approach, the verdict could serve as a further show of strength in its bid to counter the takeover bid.

A quick operation

"The purchase [of TSB] was a short process because we already knew the bank," said Santander CEO Héctor Grisi last week. Grisi recalled that the bank had already expressed interest in the British entity years ago. But the speed with which the transaction was closed has not gone unnoticed given the context of the takeover bid. Getting rid of TSB leaves Banco Sabadell smaller and with full influence in the Spanish market. For BBVA, this means not only being unable to make the leap into the United Kingdom, but also acquiring a less powerful bank, which has a direct impact on the resulting entity if the takeover bid is successful. In fact, the bank, chaired by Carlos Torres, has decided to wait until this Thursday's shareholders' meetings to update the takeover prospectus, which the National Securities Market Commission (CNMV) expects to approve in early September. Among other things, the document will reflect the impact of the sale of TSB.

Given this scenario, there has been speculation in recent days about the possibility of BBVA backing out. "There are no guarantees of anything," BBVA CEO Onur Genç stated last week. Genç maintained that BBVA intends to continue with its plans, "as long as this [the purchase of Sabadell] creates value." If the transaction goes ahead, it will be up to Sabadell shareholders to accept BBVA's offer or not. The Bilbao-based bank set the minimum threshold for the number of shares that Sabadell shareholders must sell for the takeover bid to be successful at 50.1%.

For all these reasons, and in particular because of the extra remuneration that Sabadell has promised investors (only those who hold the bank's shares will receive the dividend when the operation is resolved in the first quarter of 2026), the market has interpreted the move as a defensive gesture in the face of BB's hostile takeover bid.

An initial headache

But the prominence surrounding TSB today hasn't always been the same. The acquisition of the British subsidiary wasn't a bed of roses, and in fact, It became one of the biggest headaches the bank has experienced in recent years. Following the problems arising from the technological migration in 2018. That episode not only resulted in the resignation of TSB's then-CEO, Paul Paster, and the payment of a €55 million fine, but also represented a burden on Sabadell's accounts to the point of speculating on the final result.

After that obstacle, however, the Valles-based bank put a strategy for TSB on track through a restructuring plan. In 2021, with César González-Bueno as the new CEO, replacing Jaume Guardiola, TSB returned to profit, and Sabadell no longer considered a future without him. In fact, the Valles-based entity even rejected an offer presented by The Co-operative Bank for around €1.2 billion. "We feel comfortable with our size in Spain," argued González-Bueno, who, after The Co-operative Bank's rejection, reaffirmed the board's mandate to "not consider any short-term sale transactions." A decision that has changed in 2025.