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Spanish bank BBVA has launched a hostile €11.5bn offer for Banco Sabadell after the board of its smaller rival rejected the approach.
BBVA took its all-share offer directly to Sabadell’s shareholders on Thursday, less than a week after the target’s board said it “significantly undervalued” the bank and its prospects.
The offer values each Sabadell share at €2.13 each, an 18 per cent premium to the stock’s closing price on Wednesday.
“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,” BBVA chair Carlos Torres said on Thursday.
BBVA made its offer last week, which the Sabadell board formally rejected on Monday. The offer initially valued Sabadell at €12bn, but that price has since fallen as BBVA shares have declined over the last week.
Sabadell board’s said on Monday that the BBVA offer “significantly undervalued” its growth prospects.
The increasingly fractious public spat between the two banks is rare in Spain, a country that is unaccustomed to hostile bids.
On Wednesday, Sabadell took the unusual step of publishing a private email sent on Sunday by Torres to its chair Josep Oliu in which BBVA indicated it would not increase its bid.
“I consider that it is very important that your board of directors knows that BBVA has no room to improve its economic terms,” Torres wrote.
The deal would bring together the third and fourth largest banks in the Spanish market, creating a lender with the biggest domestic balance sheet.
The two banks attempted to strike a deal four years ago at the height of the pandemic, but merger talks between the pair broke down after two weeks following disagreements over pricing.
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