Spanish bank BBVA has made a bold move by launching an €11.5bn hostile offer for Banco Sabadell after the smaller rival’s board rejected a previous approach. The offer, which values each Sabadell share at €2.13, represents an 18 per cent premium to the stock’s closing price on Wednesday.
BBVA’s chair, Carlos Torres, described the offer as “extraordinarily attractive” and aimed at creating a bank with greater scale in one of their most important markets. This move comes after Sabadell’s board deemed the initial offer as significantly undervaluing the bank and its growth prospects.
The public spat between the two banks is rare in Spain, a country unaccustomed to hostile bids. Sabadell even took the unusual step of publishing a private email from BBVA’s Torres to their chair, Josep Oliu, indicating that there would be no room for improvement in the economic terms of the offer.
If successful, the deal would bring together the third- and fourth-largest banks in the Spanish market, creating a powerhouse with the largest domestic balance sheet. This isn’t the first time the two banks have attempted to merge, as talks four years ago broke down due to disagreements over pricing.
The unfolding drama between BBVA and Banco Sabadell is sure to keep investors and industry watchers on the edge of their seats as they wait to see how this high-stakes battle for control plays out.