Sabadell’s UK Bank Sale Could Be a Win-Win-Win

Judged by the share prices, Banco de Sabadell SA’s deal to sell its UK arm, TSB, to Spanish rival Banco Santander SA for nearly £2.7 billion ($3.7 billion) is great news for everyone involved. The British sale all but guarantees a big payout for Sabadell investors, while giving Santander a small but helpful lift in its quest to boost its UK returns. And then for BBVA SA, this moment may offer a face-saving way out of its long and increasingly troubled pursuit of Sabadell.

Carlos Torres, BBVA’s chairman, has every right to feel aggrieved at the way his expansion plans have been frustrated by politics and his target’s nimble maneuvers. However, he needs a cool head now to assess if the tender offer to Sabadell shareholders is still worth launching. The pull of sunk costs and indignation can both be very strong.