Sabadell’s board of directors rejected BBVA’s initial acquisition proposal on the grounds that it significantly undervalued the company’s potential and growth prospects.
Last week, Sabadell CEO César González-Bueno said the bidder had underestimated the negative effect of the merger on capital reserves and overestimated cost savings.
The union of the second and fourth largest banks in the country, after the failure of a similar attempt in 2020, would create an entity with more than one trillion euros in total assets.
BBVA this month offered one newly issued BBVA share for every 4.83 Sabadell shares, a 30% premium over closing prices on April 29. The premium was around 8% on Friday, valuing Sabadell at about 11.2 billion euros, according to Reuters calculations.
The offer, which requires the minimum approval of 50.01% of Sabadell shareholders, provoked opposition from the Government, which said it feared that the Spanish financial system would be harmed and jobs would be lost.
Under Spanish law, the Government cannot stop the acquisition process, but it has the final say in whether to allow an acquisition or a merger.
BBVA will try to convince regulators of the advantages of the operation, a phase that, according to the bank, could take between six and eight months, before formally going to shareholders.
The bank expects the operation to be completed by mid-2025.
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