The headquarters of the Spanish bank BBVA are seen in Madrid, Spain.
Juan Medina | Reuters
Spanish bank BBVA on Thursday presented a 12.23 billion euro ($13.11 billion) takeover bid for rival Sabadell directly to shareholders, even though Sabadell’s board this week already rejected the proposal on the same terms.
BBVA’s decision follows Sabadell’s board on Monday saying the unsolicited bid significantly undervalued the bank’s potential and growth prospects. The board repeated that position on Thursday.
“We are presenting to Banco Sabadell’s shareholders an extraordinarily attractive offer to create a bank with greater scale in one of our most important markets,” said BBVA’s Executive Chairman Carlos Torres Vila.
Hostile takeover bids are rare in European banking. A recent example is Intesa’s successful takeover of UBI Banca in 2020.
BBVA, Spain’s second-biggest bank by market value after Santander, offered an exchange ratio of 1 newly issued BBVA share for every 4.83 Sabadell shares, a premium of 30% over April 29 closing prices.
Spanish banks have been looking for ways to increase revenue as a boost from high interest rates begins to fade.
Buying Sabadell would allow BBVA to diversify from Mexico, its main market, and other developing economies such as Turkey and South America and focus on its domestic market.
BBVA Chief Executive Onur Genc said, “all stakeholders will benefit from this operation”.
“Banco Sabadell has done an excellent job, with remarkable progress in recent years, and now its shareholders can join an entity with an unparalleled combination of growth and profitability in Europe,” Genc said.
The deal, which BBVA estimates could bring cost savings of 850 million euros before taxes, would give Sabadell shareholders a 16% stake in the combined lender.
BBVA aims to create a lender with more than 100 million customers globally and assets exceeding 1 trillion euros, second only to Santander among Spanish banks.
The combined entity would also overtake Caixabank as Spain’s biggest domestic lender with over 625 billion euros in assets in the country, compared with Caixabank’s just over 574 billion euros.
Spain’s banking sector has seen a period of consolidation as lenders seek to cut costs and boost scale. Spain now has 10 banks, down from 55 before the start of the 2008 global financial crisis.
BBVA and Sabadell called off merger talks in November 2020 as they did not agree on the terms, including the price tag.
