Banc Sabadell turns down BBVA merger offer over valuation concerns

Catalan bank says proposal 'significantly undervalues' its project and growth prospects

Banc Sabadell headquarters in Sant Cugat del Vallès
Banc Sabadell headquarters in Sant Cugat del Vallès / Maria Asmarat
Catalan News

Catalan News | @catalannews | Barcelona

May 6, 2024 08:01 PM

May 6, 2024 08:25 PM

Banc Sabadell has rejected BBVA's merger offer due to valuation concerns, according to a statement sent to the Spanish stock market regulator (CNMV).

The Catalan bank said BBVA's bid "significantly undervalues" its project and growth prospects.

The board of directors of Banc Sabadell believes that the bank "will create more value for shareholders as an independent entity."

In the statement, Banc Sabadell also warns that the "significant" drop in BBVA's share price following the announcement of the merger "creates additional uncertainty about the value of the proposal".

BBVA has not yet commented on the matter and it is not known whether it will try to make a better offer.

BBVA's offer to Banc Sabadell

The BBVA's offer included a 30% premium per share and a guarantee of "total commitment" to Catalonia

BBVA also offered Sabadell three seats on its board of directors, one of them as vice president

Its proposal included having two corporate headquarters, maintaining Sabadell's current offices in Sant Cugat, just outside Barcelona. 

BBVA said it would maintain the Sabadell brand in areas where there is "relevant commercial interest." 

Failed merger talks in 2020

This is the second time the Catalan bank rejects a merger offer from BBVA.

In 2020, the two financial institutions already explored a merger, but the talks failed after two weeks of negotiations. 

Banc Sabadell's management board decided to reject a deal after "a disagreement over a potential exchange ratio of both firm's shares."

If the merger were to go through, it would make the new bank the second-largest lender in Spain.