Sabadell believes BBVA's new offer 'fundamentally undervalues' Catalan bank

Banc Sabadell believes that BBVA's latest takeover offer "fundamentally undervalues" the Catalan bank.

Sabadell's Board of Directors sent a report to the Spanish regulator (CNMV) on Tuesday analyzing BBVA's revised buyout proposal, within the framework of a hostile takeover bid launched a year and a half ago.

The price offered by the Basque bank "continues to fundamentally undervalue" Sabadell's standalone value and future prospects, the statement said, adding that Sabadell’s shareholder remuneration planned over the next three years "remains higher than BBVA's revised hostile tender offer."

"Sabadell shareholders who contemplate tendering now face significant risks and uncertainties in the event of a subsequent mandatory cash tender offer," according to the report.

However, the rejection was not unanimous. The largest minority shareholder, holding 3.86% of the capital, indicated that it supports BBVA's offer.

According to Sabadell's estimates, the takeover bid price should be up to 26% higher, depending on the parameters used in the valuation.

The Board of Directors also notes that Sabadell's share price has "increased by 90%" over the past 17 months, "compared to 49% for BBVA" during the same period.

This increase is not attributed to the takeover bid, but rather to the "sustained" improvement in the Catalan bank's outlook, according to the directors.

"Given the unattractive terms and Sabadell's shareholder structure, the board expects a very low acceptance," of the takeover offer, the statement said.

Shareholder remuneration

In a parallel communication to the CNMV on Tuesday, Banc Sabadell announced an increase in shareholder remuneration, from €1.3 billion to €1.45 billion, due to "positive business performance."

The decision was made public just one day after BBVA also announced an increase in the 2025 interim dividend to €0.32 gross per share, an increase that would also be paid to Sabadell shareholders who decide to accept the takeover bid.