The board of Spanish bank Sabadell on Tuesday rejected larger national rival BBVA’s improved hostile takeover bid as 10 days remain for shareholders to make a final decision.
The proposed deal aims to create a European banking powerhouse capable of competing with industry heavyweights such as Santander, BNP Paribas and HSBC.
Earlier this month, Sabadell’s board also rejected BBVA’s initial bid that had valued the bank at around 15 billion euros ($17.6 billion).
BBVA raised its takeover offer by 10 percent last week, but Sabadell said its board had met on Tuesday and, “taking into account all the terms and characteristics of the offer, rejects the offer”.
“The price offered is significantly lower than the value of Banco Sabadell’s independent project,” Spain’s fourth-biggest bank said, urging shareholders to snub the bid.
BBVA, Spain’s second-largest bank with a large footprint in Latin America and Turkey, announced its all-share bid in May 2024.
After gaining approval for its offer from the European Central Bank and Spain’s competition and stock market regulators, BBVA must now win over Sabadell’s shareholders during a period that ends on October 10.
Founded in 1881 near Barcelona, Sabadell has a dispersed ownership structure with no investor holding more than seven percent of the shares, making the outcome of the takeover bid uncertain.
Tuesday’s report revealed that Mexican investor and board member David Martinez Guzman, who holds 3.86 percent of Sabadell’s capital, dissented and would take up BBVA’s offer.
Both banks have launched charm offensives in an attempt to seduce shareholders.
On Monday, BBVA announced an unusually high dividend that would also apply to Sabadell shareholders who accepted the offer.
Sabadell said in a separate statement on Tuesday that its board agreed to increase its 2025 payouts to shareholders from 1.3 billion to around 1.45 billion euros.
Sabadell has also sold its UK subsidiary TSB to BBVA’s biggest rival Santander, in what was seen as an effort to weaken its appeal as a takeover target.
