By Ian Walker and David Román
Banco de Sabadell SA on Friday said it had agreed a GBP1.7
billion ($2.54 billion) takeover of TSB Banking Group PLC and would
launch a rights issue to maintain its capital levels.
The two banks said last week that they were talking about a
possible deal and the announcement Friday confirms the terms of the
340 pence a share takeover.
Sabadell also said it would buy a further 9.99% interest in TSB
from Lloyds Banking Group PLC, TSB's largest shareholder. Lloyds
will still have a 40% stake in TSB after the deal and has accepted
the terms of the takeover.
Banco Sabadell, a midsize Spanish lender with a limited
footprint outside its home country, said in a separate statement it
would raise EUR1.6 billion ($1.71 billion) in a rights issue to
maintain its common equity tier 1 capital ratio, a measure of
financial strength.
TSB was part of Lloyds until June, when Lloyds floated a
minority stake at 260 pence a share. The TSB sale was a condition
of state aid received by part state-owned Lloyds in the financial
crisis.
TSB has been promoted by U.K. politicians as a "challenger bank"
to help break the U.K.'s highly concentrated banking market.
Write to Ian Walker at ian.walker@wsj.com
Access Investor Kit for Banco de Sabadell SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=ES0113860A34
Access Investor Kit for Lloyds Banking Group Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=GB0008706128
Access Investor Kit for Lloyds Banking Group Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US5394391099
Subscribe to WSJ: http://online.wsj.com?mod=djnwires