BBVA‘s Hostile takeover Bid for Sabadell to Begin Monday
MADRID – BBVA, Spain’s second-largest bank, will launch its tender offer to acquire rival Sabadell on Monday, September 9th, after receiving approval from the Spanish stock market regulator, the CNMV. The all-share offer, announced in May 2024, values Sabadell at approximately €15 billion ($18 billion) and aims to create a banking powerhouse to compete with European giants like Santander, BNP Paribas, and HSBC.
The CNMV has granted BBVA 30 days to secure acceptance from Sabadell shareholders representing more than half of the voting rights, excluding treasury shares. BBVA asserts the offer is “very attractive,” representing sabadell’s “best valuation in more than a decade” and a premium exceeding recent European transactions. According to BBVA Chair Carlos torres Vila, shareholders would see earnings per share 25 percent higher than with an self-reliant sabadell.
Though,Sabadell Chairman Josep Oliu countered that his bank has outperformed BBVA in shareholder value and rewards as the bid was launched. He described the offer as “weak” and based on “unrealistic assumptions,” arguing it “undervalued our entity’s standalone project.”
Sabadell has actively defended against the takeover, notably selling its UK subsidiary, TSB, to Santander for €3.1 billion – a move analysts believe was intended to bolster its defenses by increasing cash reserves for dividends or share buybacks.The proposed merger faces hurdles, including a three-year freeze on integration imposed by Madrid in June to maintain market competition. BBVA has already secured approvals from the European Central Bank and Spain’s competition authority, overcoming initial opposition from the Spanish goverment concerned about reduced competition.BBVA recently reported a record net profit of €5.45 billion for the first half of 2024, a 9.1 percent increase from €4.99 billion year-over-year.
Founded in 1881 near Barcelona, Sabadell’s dispersed ownership – with no single investor holding more than seven percent – adds uncertainty to the outcome of the bid.
