The BBVA has announced a revised offer for the takeover of Sabadell, proposing one of its shares for every 4.8376 Sabadell shares, marking a 10% increase from its previous proposal. This information was released in a communication to the Spanish National Securities Market Commission (CNMV) today.
Previously, the Basque bank offered one new BBVA share plus €0.70 for every 5.5483 shares of the Catalan bank Sabadell.
With the offer now entirely based on shares, shareholders benefiting from capital gains will be exempt from taxation in Spain if over 50% of Sabadell’s voting rights accept the offer, as it would be considered tax-neutral, BBVA highlighted in their statement to the CNMV.
Reflecting financial market closing values from last Friday, BBVA’s previous offering included one new share of BBVA (€16.41) plus €0.70, equaling €17.11 for 5.5483 shares of Sabadell, collectively valued at €16.81. This offered Sabadell shareholders a 1.8% premium.
With the new proposal, the premium increases to 11.8%, as the offer is one BBVA share (€16.41) for 4.8376 Sabadell shares (€14.65), along with potential tax exemption.
The CNMV has three days to review and approve BBVA’s new proposal, which will extend the duration of the offer according to Spanish legislation, pending the commission’s review.
Initially, the deadline for the offer was set for October 7, by which Sabadell shareholders could accept BBVA’s proposal.
BBVA had until Tuesday, September 23, to amend the offer’s terms, which they accomplished today.
In the communication to the CNMV, BBVA President Carlos Torres stated that the new offer is “extraordinary, with historic valuation and prices.”
With the new proposal, BBVA values each Sabadell share at €3.39, a record high in over a decade, according to the Basque bank.
Sabadell’s CEO, César González-Bueno, reiterated today that BBVA’s offer remains unfavorable despite the improved price, noting that premiums are typically around 30%.
“The offer is poor because it’s worse even than the original one made to us [in May 2024],” César González-Bueno remarked in an interview with Spanish radio station Onda Cero.
BBVA’s hostile takeover bid for Sabadell commenced on September 8 and targets 100% of Sabadell’s share capital, amounting to 5,023,677,732 shares.
On September 12, Sabadell’s Board of Directors unanimously rejected the offer and advised shareholders against selling at the proposed insufficient value.
BBVA’s takeover bid for Sabadell has been ongoing for over a year.
At the end of April, the bid was authorized by the Spanish market regulator.
On June 24, in an unprecedented move, the Spanish Government took the bid to the Council of Ministers and stipulated it would only approve it if the two banks maintained separate legal personalities, assets, and management for three years.
The government can extend this requirement by two more years after three years.
The decision was justified by the need to protect “general interest” principles as outlined in Spanish law, endorsed by European Union court jurisprudence.
These “general interest” criteria relate to ensuring SME financing, safeguarding both banks’ workforces, territorial cohesion, social policy objectives (such as housing access or foundation activities), and promoting investment in research and technology.
Brussels has opened an infringement procedure against Spain over the legislation that allowed the government to set conditions for the banks’ merger.
On August 11, BBVA decided to proceed with the offer, despite the government’s conditions.
Catalan bank Sabadell opposes the offer, and both the Spanish and Catalonia regional governments have expressed reservations.
If completed, the merger will create an entity with nearly one trillion euros in assets, 135,462 employees globally (19,213 from Sabadell), and over 7,000 branches.
It would become one of Europe’s leading banks, surpassing CaixaBank (owner of Portugal’s BPI) in assets, positioning itself as Spain’s second-largest bank by assets.
