Spain’s BBVA ups hostile takeover bid for rival Sabadell in take-it-or-leave-it ultimatum for shareholders
SPANISH banking giant BBVA has increased its hostile takeover bid for rival Banco Sabadell by 10%, declaring this will be its final offer with no further improvements or extensions.
The Bilbao-based bank announced the sweetened deal just two days before the official deadline for offer improvements, revealing it will now exchange one BBVA share for every 4.8376 Sabadell shares.
The previous offer combined shares with cash, creating tax complications for shareholders.
BBVA chairman Carlos Torres has structured the new deal as an entirely share-based transaction, eliminating the tax penalty that was deterring investors.
The bank stated the transaction would be ‘tax-neutral’ for shareholders if it achieves more than 50% acceptance, meaning participants won’t face capital gains taxes of 19-28%.
The improved offer values Sabadell shares at €3.39 each – the highest level in over a decade – and puts the total acquisition price at €17 billion, up from the initial €12.2 billion when the hostile bid was launched in May 2024.
However, Sabadell’s shares tumbled more than 4% at market opening on Monday, while BBVA lost nearly 2%.
READ MORE: BBVA goes to Spain’s Supreme Court to fight government ‘meddling’ in Sabadell Bank takeover
The market reaction reflects investor scepticism about the deal’s prospects.
Sabadell CEO Cesar Gonzalez-Bueno dismissed the improved offer, telling Onda Cero radio: “The offer is bad because it is worse than the original one they made us.”
He pointed out that Sabadell shareholders would now own 15.3% of the combined entity, up from 13.6% previously but still lower than the original 16.2% proposed.
BBVA’s decision to remove uncertainty around further improvements was partly driven by pressure from Gonzalez-Bueno, who had demanded Torres commit in writing to not extending or improving the offer beyond the deadline.
But the deal faces major obstacles. Despite Sabadell’s own customers owning around 40% of the bank’s shares, very few investors have shown interest in selling to BBVA so far.
READ MORE: Sabadell Bank shareholders massively back TSB sale as fight against BBVA takeover continues in Spain
For the takeover to succeed, BBVA needs at least half of Sabadell shareholders to accept the offer.
If fewer people participate but the figure stays above 30%, Spanish law would force BBVA to make a second offer – this time paying entirely in cash rather than shares.
The original deadline of October 7 has now been pushed back to October 10 while Spain’s financial watchdog reviews the new proposal.
Once approved, Sabadell’s board will have five days to give its official verdict.
If successful, the merger would create Spain’s second-biggest bank.
However, the deal has met fierce opposition from Sabadell’s bosses and Spanish government ministers who worry it could reduce competition in the banking market.
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