The headquarters of the Spanish financial institution BBVA are seen in Madrid, Spain.
Juan Medina | Reuters
Spanish financial institution BBVA on Thursday offered a 12.23 billion euro ($13.11 billion) takeover bid for rival Sabadell on to shareholders, although Sabadell’s board this week already rejected the proposal on the identical phrases.
BBVA’s resolution follows Sabadell’s board on Monday saying the unsolicited bid considerably undervalued the financial institution’s potential and progress prospects. The board repeated that place 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,” stated BBVA’s Government Chairman Carlos Torres Vila.
Hostile takeover bids are uncommon in European banking. A latest instance is Intesa’s profitable takeover of UBI Banca in 2020.
BBVA, Spain’s second-biggest financial institution by market worth after Santander, supplied an trade ratio of 1 newly issued BBVA share for each 4.83 Sabadell shares, a premium of 30% over April 29 closing costs.
Spanish banks have been on the lookout for methods to extend income as a lift from excessive rates of interest begins to fade.
Shopping for Sabadell would enable BBVA to diversify from Mexico, its major market, and different growing economies corresponding to Turkey and South America and concentrate on its home market.
BBVA Chief Government Onur Genc stated, “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 stated.
The deal, which BBVA estimates may deliver value financial savings of 850 million euros earlier than taxes, would give Sabadell shareholders a 16% stake within the mixed lender.
BBVA goals to create a lender with greater than 100 million prospects globally and belongings exceeding 1 trillion euros, second solely to Santander amongst Spanish banks.
The mixed entity would additionally overtake Caixabank as Spain’s greatest home lender with over 625 billion euros in belongings within the nation, in contrast with Caixabank’s simply over 574 billion euros.
Spain’s banking sector has seen a interval of consolidation as lenders search to chop prices and increase scale. Spain now has 10 banks, down from 55 earlier than the beginning of the 2008 world monetary disaster.
BBVA and Sabadell referred to as off merger talks in November 2020 as they didn’t agree on the phrases, together with the value tag.
