By Dean Seal

The board of Banco de Sabadell is asking the company's shareholders to approve a roughly $4 billion sale of its British subsidiary TSB to Spanish peer Banco Santander.

Sabadell said Tuesday that the bid carries an all-cash price tag of 2.65 billion British pounds ($3.46 billion). The final price is expected to rise to 2.9 billion pounds, when including profits that are projected to flow in through the transaction's estimated completion in the first quarter of next year.

Investors will vote on the sale at Sabadell's Aug. 6 shareholders meeting. The bank is proposing a cash dividend payment to shareholders of half a euro (59 U.S. cents) a share once the deal closes. That would pay out about 2.5 billion euros in total.

Chairman Josep Oliu said the deal would benefit shareholders regardless of the outcome of a hostile takeover bid by Banco Bilbao Vizcaya Argentaria, or BBVA. The Spanish government ruled last month that BBVA had to wait at least three years and up to five years to legally merge with its smaller peer.

BBVA said Monday that it wouldn't withdraw its offer for the Catalan lender Sabadell, which BBVA started pursuing in early May of last year to bolster its presence in its home market.

Sabadell said Tuesday that if the takeover bid is successful, BBVA is entitled to remuneration from the TSB sale just like any other Sabadell shareholder.

As part of the sale, TSB debt securities subscribed by Sabadell would transfer at fair value on completion, including perpetual convertible bonds, subordinated debt and senior unsecured bonds.

Sabadell has agreed not to compete in the U.K. market for 24 months after the sale is completed.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

July 01, 2025 15:01 ET (19:01 GMT)

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