Initial Public Offering(IPO)





Hello. We’re TSB, Britain’s newest bank, and we’re proud to be back on 631 high streets right across Britain.

We’re here to bring more competition to the UK banking market, and ultimately better banking for all. The way we’ll do that is by serving only individuals and local business customers. That’s why we won’t be offering things like investment banking, or overseas speculation, or big corporate finance.

Instead, our 8000 staff will focus simply on looking after £22 billion on behalf of our 4.5million customers. Because the more we can help our customers, and the communities they are part of, to thrive, the more successful TSB will be. We call this kind of balanced, straightforward banking "local banking".

It’s the kind of banking that we believe is the best way to help the households and local businesses that make up the communities of which we are all a part.

Of course, this approach to banking is nothing new. In fact, it’s over 200 years old.

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Offer for TSB Banking Group plc

OFFER FOR TSB BANKING GROUP PLC

Lloyds Banking Group plc (together with its subsidiaries, the 'Group') notes the announcement by TSB Banking Group plc ('TSB') in relation to the agreed terms of the recommended cash offer for TSB Banking Group plc by Banco de Sabadell, S.A. ('Sabadell') pursuant to which Sabadell will acquire the entire issued and to be issued share capital of TSB (the 'Offer'). The Group has agreed to sell a 9.99 per cent interest in TSB to Sabadell, and the Group has entered into an irrevocable undertaking to accept the Offer in respect of its entire remaining 40.01 per cent shareholding in TSB, as further described below.

Under the terms of the Offer, TSB Banking Group plc shareholders will receive 340 pence per share in cash for each TSB share, which values the entire issued share capital of TSB at approximately £1.7 billion.

António Horta-Osório, Group Chief Executive of Lloyds Banking Group plc, said:
"I am delighted to confirm we have agreed terms for the sale of our remaining stake in TSB to Sabadell. This is a significant and positive step for the Group and will enable us to meet our commitments to the European Commission, well ahead of its mandated deadline."

The Group currently owns approximately 50 per cent of the issued share capital of TSB, which is held by Lloyds Bank plc ('Lloyds'), a wholly owned subsidiary of Lloyds Banking Group plc. Lloyds and Sabadell have entered into a sale and purchase, irrevocable undertaking and option deed, which includes the following elements:
a) a sale and purchase agreement under which Lloyds will sell to Sabadell 49,999,999 TSB shares (representing 9.99 per cent of the issued ordinary share capital of TSB) at the Offer price of 340 pence per share for a total cash consideration of £170 million, such sale being expected to complete on 24 March 2015 (the 'Firm Shares');
b) an irrevocable undertaking over Lloyds' entire remaining holding of TSB Shares following the acquisition of the 9.99 per cent holding, representing 40.01 per cent of the issued ordinary share capital of TSB, less any TSB shares acquired by Sabadell pursuant to the Call Option, as outlined below. The undertaking from Lloyds shall remain binding in the event of a competing offer being made for TSB. The maximum cash consideration Lloyds could receive by accepting the Offer under the terms of this irrevocable undertaking is £680 million, based on the Offer price of 340 pence per share; and
c) a call option (the 'Call Option') in favour of Sabadell to acquire from Lloyds up to 100,000,000 TSB shares (representing 20 per cent of the issued ordinary share capital of TSB) (the 'Option Cap'), such Call Option exercisable up to four times over any number of TSB shares up to the Option Cap and at any time following the receipt of certain regulatory approvals until such time as the Offer is unconditional in all respects, lapses or is withdrawn. The maximum cash consideration Lloyds could receive under the Call Option is £340 million, based on the Offer price of 340 pence per share.
The maximum aggregate cash consideration Lloyds could receive under the sale and purchase, irrevocable undertaking and option deed is £850 million, at the Offer price of 340 pence per share. The net proceeds from the sale of Lloyds' shares in TSB will be used for general corporate purposes.

The Offer is conditional upon, amongst other things, the PRA consenting to the acquisition by Sabadell of control of TSB and upon anti-trust clearance from the European Commission. For full terms and conditions of the Offer, please see Sabadell's Rule 2.7 announcement of 20 March 2015. The sale and purchase, irrevocable undertaking and option deed referred to above will be available for inspection by no later than 12 noon (London time) on the business day following this announcement at Sabadell's website at www.sabadelltsbinfo.com and TSB's website at www.tsb.co.uk.

The transaction will lead to a charge through the Group's income statement of approximately £640 million reflecting the net costs of the Transitional Service Agreement between Lloyds and TSB, the contribution to be provided by Lloyds to TSB in moving to alternative IT provision and the gain on sale. This charge to the income statement will be recognised on de-consolidation of TSB, which will occur upon settlement of the Firm Shares. The capital impact upon settlement of the Firm Shares will be a c.21 bps decrease in the Group's common equity tier 1 capital ratio. On completion of the Offer, there will be a further reduction in the common equity tier 1 capital ratio of c.6bps. The total effect of the transaction will be a c.27 bps decrease in the common equity tier 1 capital ratio.

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1st Quarter Results

I have been contacted by Barclays regarding the takeover. I have 2 options, take the money (340p per share) or wait for further info. I got the shares via the IPO and was expecting a 5% increase in the Number of shares if I hold them for a year. If I take the money I assume I will not be compensated for this 5%? Any thoughts on this? thanks H