The UK’s TSB Banking Group has confirmed it has received a preliminary proposal from Spanish bank Sabadell for the acquisition of its entire share capital.

The proposal is for 340 pence in cash per TSB share, with the UK bank saying it would be “willing to recommend an offer at the proposed price”.

The offer values TSB at £1.7 billion (€2.4 billion). TSB has a current market value of around £1.3 billion (€1.84 billion) and is the UK’s seventh largest bank.

The Board of TSB said in a statement it: “believes that Sabadell could support and accelerate TSB's retail growth strategy and accelerate the expansion of TSB's presence in the SME sector.”

Citigroup and Rothschild are acting as financial advisers to TSB and Goldman Sachs is acting as financial adviser to Sabadell.