9 May, 2024 @ 15:00
1 min read

Bank wars in Spain: BBVA announces hostile takeover of rival Sabadell – after merger deal failed

SPANISH bank BBVA has launched a hostile takeover bid for Banco Sabadell after its merger bid was rejected.

BBVA will now attempt to bypass Sabadell’s board and woo its shareholders directly after the Catalan bank’s board decided against the €12.2 billion deal from it’s Basque rivals on Monday.

Sabadell’s ownership structure is divided between institutional investors (52%) and retail investors (48%), and BBVA will have to convince at least 50% of them to take up their offer.

READ MORE: Hundreds join protest against controversial solar farm on Spain’s Costa Blanca that ‘threatens wildlife and 10,000 trees’

BBVA bank bosses in Spain to reduce compulsory redundacies after one-day strike
BBVA has returned with a hostile takeover bid of Catalan bank Sabadell. Photo credit: Isabel Infantes/EMPICS

The hostile takeover bid remains unchanged from the one previously rejected by Sabadell’s board, with BBVA proposing an exchange ratio of one BBVA share for every 4.83 Sabadell shares.

The Spanish government, which has signalled its disapproval of BBVA’s hostile approach, will provide another obstacle to overcome.

Economy Minister Carlos Cuerpo pointed out the government has the ‘final say’ on the matter and the merger must undergo the necessary regulatory approvals. 

However BBVA have cited the potential benefits of the merger.

They include increased profitability, cost savings of around €850 million annually, and a stronger position to compete with the big boys in the European market. 

READ MORE: Toll charges will NOT be removed on the AP-7 on the Costa del Sol: Spain’s central government rejects proposal to reduce traffic woes

They also estimate an earnings per share increase of 3.5% and a return on investment of close to 20% by 2026.

BBVA plans to submit the prospectus outlining the offer details and the request for authorization to the Spanish Securities and Exchange Commission (CNMV) within the one-month deadline. 

The bid will have to jump through hoops put up by various regulatory bodies, both in Spain and abroad.

The Spanish National Competition Commission (CNMC), the UK’s Prudential Regulation Authority (due to Sabadell’s UK subsidiary TSB), and the BBVA’s board, who will have to approve of a capital increase to generate the new shares for the exchange, will all have a say. 

The bank estimates the closing of the transaction to take between six and eight months, with the technological integration between the two entities taking an additional 12 to 18 months.

Walter Finch

Walter - or Walt to most people - is a former and sometimes still photographer and filmmaker who likes to dig under the surface.
A NCTJ-trained journalist, he came to the Costa del Sol - Gibraltar hotspot from the Daily Mail in 2022 to report on organised crime, corruption, financial fraud and a little bit of whatever is going on.
Got a story? walter@theolivepress.es
@waltfinc

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Previous Story

WATCH: Wanted British ‘drug trafficker’ is arrested in Benidorm after four YEARS on the run: ‘Violent’ Manchester thug faces LIFE in prison over ‘cocaine and ketamine empire’

PSpanish police officer is arrested 'for groping a young woman's buttocks' at the Malaga feria
Next Story

Dog finds a human ARM at a ‘finca’ in Spain: Police analyse ring on victim’s finger after failing to find rest of the body

Latest from Business & Finance

Go toTop

More From The Olive Press