TSB Shares Surges 26% After Banco Sabadell Offer

Shares of TSB Banking Group PLC surged 26% in London on Thursday after confirming it's in talks with Banco de Sabadell to be snapped up by the Spanish lender. TSB said Banco Sabadell has offered to buy it for 3.40 pounds ($5.09) a share, almost 30% more than the closing price on Wednesday of �2.64 a share. The board of the U.K. lender has indicated it's willing to recommend the offer to shareholders, depending on the conditions of the deal. Lloyds Banking Group floated 35% of TSB last year at �2.60 a share. "With [Lloyds] still holding a 50% stake in TSB it will have a deciding vote on any offer, but with the UK government (UKFI) still holding around 23% in [Lloyds] itself it may also have a say in the matter given its aim of recouping its bailout investment," said Mike van Dulken, head of research at Accendo Markets, in a note.