Sabadell's offer for TSB an 'unexpected but logical' step, says Investec
Analysts at Investec Securities have described Banco de Sabadell’s cash takeover offer for TSB as an “unexpected” proposal, adding it was a “logical” step for the lender.
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On Thursday, TSB, which floated in 2014, received a 340p cash-per-share offer from the Spanish lender and Lloyds Banking Group, which still owns 50% of TSB after the initial public offer carried out last June, said it "would be minded to accept an offer at this price if it is made", subject to agreement on the other conditions of the offer.
In a note to investors, Investec analysts said they believed TSB had been trading at an artificially cheap price “reflecting the 'overhang' of Lloyds’ residual 50% stake.”
The broker added the acquisition logic was “robust” and raised its target price from 300p to 340p, though it warned that the likelihood of a counter bid was limited and cut its rating on the stock from ‘buy’ to ‘hold’.