Spanish bank BBVA (BBVA.MC), opens new tab on Friday asked stock market supervisor CNMV to authorise its 12.23-billion-euro ($13.29 billion) hostile takeover offer for smaller rival Sabadell (SABE.MC), opens new tab, a potential tie-up of lenders that Madrid opposes.
The filing with the CNMV formally kicks off the regulatory process for BBVA’s bid and is expected to take several months. The deal also requires the green light from the European Central Bank.
Sabadell’s board rejected BBVA’s initial takeover proposal, saying it believed BBVA’s proposal significantly undervalued the potential of Sabadell and its growth prospects.
Last week, Sabadell’s CEO Cesar Gonzalez-Bueno said that the bidder had underestimated the deal’s negative effect on capital reserves and overestimated cost savings.
A union of the country’s second- and fourth-largest banks – following a failed similar attempt in 2020 – would create a lender with over 1 trillion euros in total assets and mark the latest consolidation in Spain’s banking sector.
BBVA offered this month one newly-issued BBVA share for every 4.83 Sabadell shares, a premium of 30% over April 29 closing prices. That premium was around 8% on Friday, valuing Sabadell at about 11.2 billion euros, according to Reuters calculations.
The offer, which needs minimum approval of 50.01% of Sabadell shareholders, triggered opposition from the government, which said it feared Spain’s financial system could be harmed and jobs lost.
Under Spanish law, the government cannot stop the takeover process but has the final word on allowing an acquisition or a merger.
BBVA will seek to persuade regulators of the deal’s merits, a stage the bank said could take six to eight months, before formally going to shareholders.
Spanish antitrust watchdog CNMC will also review the deal to safeguard competition in the sector.
If the deal receives regulatory approvals, BBVA can then release the takeover prospectus.
After obtaining the approvals, BBVA plans to open within five days the acceptance period and formally make the tender offer.
BBVA expects a deal to be completed by mid-2025.
($1 = 0.9202 euros)
