Spain's Banco Sabadell has made a 1.7 billion-pound ($2.6 billion) cash offer to buy Britain's TSB, which last year split off from bailed-out Lloyds Banking Group.

TSB Banking Group PLC shares soared 26 percent in London following its Thursday statement that Sabadell made an offer valuing each TSB share at 3.40 pounds. In contrast, the share price of Barcelona-based Banco de Sabadell SA dropped 7.5 percent in Madrid following news of the tentative deal.

TBS says its board would likely recommend the offer after reaching agreements on certain terms and conditions it did not specify.

Sabadell is not the only Spanish bank looking to expand outside Spain. Despite recent signs of life, the Spanish economy has a way to go to recover the ground lost over the past few years.