BBVA improves by 10% takeover bid offer for Banc Sabadell

The Basque bank, BBVA, improved by 10% its takeover bid offer for Catalan bank, Banc Sabadell, on Monday morning, according to a statement released by the Spanish Market Regulator (CNMV).

The Spanish bank will now offer one BBVA share per each 4.8376 shares of Banc Sabadell, an improvement from its initial offer of one share and €0.7 in cash for each 5.5483 shares of Banc Sabadell. 

The new offer arrives just one day before the deadline, and after many negatives from BBVA's managing team, who had been completely opposed to the improvement since day one.

BBVA also praised the improvement as it also "improves taxes on the operation" as all the exchange will be based on shares, therefore, Banc Sabadell shareholders will not have to pay taxes in Spain if the takeover bid goes forward.

The Basque bank has also said that it will not do any other improvements and that it will not extend the deadline for Banc Sabadell shareholders to decide whether they back the bid or not.

Late last week, Banc Sabadell's CEO César González-Bueno, said that the bank's shareholders consider the takeover bid "worthless" and that none of its retail shareholders had accepted the Basque bank's offer.

“It is very significant. This hostile bid at this price makes absolutely no sense,” he said on Friday.

The comments arrived a week after the board of directors of the Catalan bank unanimously rejected the bid as it "destroys" shareholder value. At the time, the board was voting on the offer on the table back then.

BBVA launched a hostile takeover bid for Banc Sabadell in May 2024, and since then it has been approved by the market regulator and Spanish authorities. However, the Spanish government first launched a public consultation regarding the bid and enforced several conditions which are now challenged by the European Union.

'Worse than first'

Hours after BBVA's announcement, González-Bueno rejected the new offer and said that "it is worse than the first one," and that the improvement is "not very relevant," as he said in an interview with Spain's Onda Cero radio.

"The takeover bid offer is very weak," González-Bueno, CEO of Banc Sabadell, said and told shareholders that "he will not take part in the takeover bid, and with these new conditions, it is impossible."

Once Spain's CNMV approves the new offer, the managing board has five days to meet and vote on the new conditions.

He said that the offer is "bad" and that if the takeover bid goes ahead, Banc Sabadell shareholders will own 15.3% of BBVA's shares, an increase from 13.6% in the previous offer. However, it is still lower than the estimated 16.2% from the first offer announced in May 2024, which Banc Sabadell leaders had already rejected.

Stock market

During the early hours of Monday morning, both BBVA and Banc Sabadell lost 3.08% and 4.25%, respectively, of their market value by 2pm.

In fact, their losses led to other financial institutions to be on red, such as CaixaBank with 1.69% less of its value, Santander with 1.55%, and Bankinter with 2.55%.

Overall, Spain's stock index Ibex 35, listing the country's 35 most powerful companies, saw 1% drop.

Banc Sabadell's stock price was €3.20 at 2pm.