Sabadell Urges Shareholders to Reject BBVA’s Hostile Takeover Bid

Lead Spanish lender Banco Sabadell’s board on Friday unanimously recommended rejecting BBVA’s €15 billion hostile takeover offer, warning that the bid undervalues Sabadell’s assets and poses execution risks.

Nut Graf The Catalan bank’s directive comes at the start of a 30-day acceptance period that runs until October 7, intensifying pressure on BBVA to sweeten its offer or risk failure of the deal slated to reshape Spain’s banking landscape.

Key Details

• Board Concerns
• The offer “grossly undervalues Sabadell’s operations” and rests on “unrealistic assumptions,” according to chairman Josep Oliu.
• Sabadell cited risks of revenue loss and uncertain cost synergies, now delayed by government-imposed restrictions.
• Shareholder Vote
• Acceptance period began Monday and closes October 7, with final outcome due October 14.
• BBVA needs at least 50% shareholder approval but may revise terms if support falls short.
• Regulatory Hurdles
• Spanish government has barred full merger for three years, limiting projected cost savings from €850 million by 2028 to €900 million by 2029.
• BBVA is permitted to adjust its offer until 10 working days before the acceptance phase ends.

Outlook Analysts anticipate BBVA must raise its bid premium-currently negative relative to Sabadell’s April 2024 close-to win over investors. Failure to do so could derail consolidation ambitions and leave Sabadell independent.