Sabadell to sell UK subsidiary TSB to Santander for nearly €3.1 billion

The Board of Directors of Banc Sabadell has accepted Banco Santander's offer to acquire its UK subsidiary, TSB.

Santander will pay nearly €3.1 billion (£2.65 billion) to strengthen its position in the United Kingdom, where it is already the fourth-largest mortgage lender.

Sabadell announced on Tuesday it will convene a general shareholders' meeting to approve the sale.

The move from the Catalan bank has been interpreted as a maneuver to hinder the ongoing hostile takeover bid by Bilbao-based BBVA.

In fact, the announcement of the sale of TSB comes just one day after BBVA decided to continue with the hostile acquisition attempt of Sabadell despite the conditions imposed by the Spanish government.

Banc Sabadell bought TSB in 2015 for £1.7 billion, then equivalent to about €2.4 billion, and about €1.98 billion at the current exchange rate.

At the time, the bank valued the acquisition as a "significant step" towards its goal of "expanding and consolidating its activity" in international markets.

The fact that the possible sale is taking place amid a takeover bid requires the bank's board of directors to convene a general shareholders' meeting to approve or reject the deal.