BBVA Launches Hostile Takeover Bid for Sabadell

In the latest banking ping-pong match, BBVA has launched a hostile takeover bid for Sabadell, after announcing plans to relaunch a merger attempt two weeks ago, revisiting plans first started in 2020, this week rejected by Banco Sabadell, on the basis of an “unsolicited, indicative and conditional” proposal.

The board chaired by Josep Oliu considered that this project “significantly undervalues” Banco Sabadell’s plan “and its growth prospects as an independent entity.” The board of directors announced its decision after a day-long meeting. BBVA states that “we regret that the board of Banco Sabadell has rejected such an attractive offer.”

In the latest move, BBVA has launched a public acquisition offer (takeover bid) of shares to try to gain control of Banco Sabadell.

In the document sent to the National Securities Market Commission (CNMV), BBVA offers the same price as last week, with a proposal to give one share of its own for every 4.83 Sabadell shares.

After this Thursday’s announcement, it is necessary for BBVA to present to the CNMV the request for approval of a brochure detailing the conditions of this offer, which it has already outlined this Thursday, and to do so it has a period of 30 days.

When the CNMV receives this brochure, it will have 7 days to study it, which can be extended to another 7 days if the supervisor requests additional information from the entity.

From that moment on, the takeover study period opens, where in addition to the CNMV, the study by the European Central Bank (ECB) enters, which will analyse whether a merger process between these entities would generate a sustainable business model.

In this procedure, the usual thing is for a team from the national supervisor, the Bank of Spain, to work together with a team from the ECB.

Once all the analysis has been carried out, the takeover prospectus would be approved or rejected.

In the event that everything goes ahead, after the supervisors’ analysis and acceptance of the offer by investors, it is the Government that has to sign the operation. A Government spokesperson has indicated that their final approval would not be given.

The possible merger would form an entity with around 400 offices in the Valencian Community and about 2,500 workers in the autonomous community, with 211 offices in the region -61 in Valencia, 132 Alicante and 17 in Castellón-, while BBVA accumulates 200.