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BBVA takes Sabadell bid approach directly to shareholders – Financial Times

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Spanish bank BBVA has launched an 11.5 billion euro hostile takeover bid for Banco Sabadell after the board of its smaller rival rejected the offer.

BBVA made an all-share offering directly to Sabadell shareholders on Thursday, less than a week after the target’s board announced it was “materially underestimating” the bank and its prospects.

The offer values ​​Sabadell’s shares at 2.13 euros per share, an 18% premium to Wednesday’s closing price.

BBVA Chairman Carlos Torres said on Thursday: “We are presenting Banco Sabadell shareholders with a very attractive offer to create a bank of greater scale in one of our most important markets. ” he said.

BBVA submitted the proposal last week, but the Sabadell board formally rejected it on Monday. The proposal initially valued Sabadell at 12 billion euros, but that price has since fallen as BBVA shares fell last week.

Sabadell’s board said Monday that BBVA’s proposal “significantly underestimates” the company’s growth prospects.

The increasingly bitter and public battle between the two banks is unusual in Spain, which is not accustomed to hostile bids.

Sabadell took the unusual step on Wednesday of releasing a private email that Torres sent to chairman Josep Oliu on Sunday, in which BBVA indicated it would not raise its bid.

“We believe it is very important that the board recognizes that BBVA has no room to improve its economic conditions,” Torres wrote.

The partnership will combine the third and fourth largest banks in the Spanish market, creating a lender with the country’s largest balance sheet.

The two banks attempted to team up four years ago at the height of the pandemic, but merger talks between the two banks collapsed two weeks later after disagreements over pricing.