TSB turns down ‘£1bn merger approach’ from Co-Operative Bank
Co-operative Bank’s £1bn-plus offer for TSB has been rebuffed by its Spanish owners.
Sabadell’s board decided to reject the offer at the end of September.
The deal would have created a high street lender with 340 branches and over eight million customers, according to Sky News, which first reported the acquisition attempt.
This would encompass mortgages, current accounts, credit cards and savings products.
It follows the collapse of talks last November between BBVA and Sabadell over the value of TSB.
The unsuccessful takeover attempt has revived speculation that Britain’s smaller, challenger banks could be on the brink of a wave of mergers.
Co-Operative Bank’s approach for TSB reflects its successful turnaround.
In the first half of this year it reported a profit of £21.4m, its first in ten years.
Co-Operative Bank were the initial frontrunners to acquire TSB from Lloyds in 2013, but the move fell-through when it uncovered a black hole in its accounts.
Sabadell’s £1.7bn acquisition of TSB in 2015 ran into issues in 2018 when IT glitches sent costs spiralling.
It had been looking to sell TSB and hired Goldman Sachs to help with the process.
However, its new CEO Cesar Gonzalez-Bueno has since frozen plans of a sale.
He wants to continue reviving the bank’s fortunes and improve the performance of its UK business.
The Spanish lenders also conducted an in-house review of its operations, which recommended keeping hold of its UK operations.