Published by Global Banking and Finance Review
Posted on September 22, 2025
By Jesús Aguado
MADRID (Reuters) -Spanish bank BBVA said on Monday it had raised its bid for smaller rival Sabadell by 10% to 17 billion euros ($19.95 billion), as part of its attempt to create the country's second-biggest bank by assets.
BBVA first made its move on Sabadell in April 2024, which turned hostile a month later, as it aimed to refocus on its home market after years of rapid expansion abroad.
That bid sparked a wave of government opposition and warnings about job losses, leading to a months-long competition review. Eventually, the government intervened and imposed conditions on the deal, blocking BBVA from merging fully with Sabadell for at least three years.
On Monday, BBVA said the bid now will be entirely in shares, so shareholders with capital gains would not be subject to taxation in Spain, if acceptance exceeded 50% of Sabadell's voting rights.
SABADELL CEO SAYS SWEETENER OFFERS ONLY SMALL PREMIUM
Sabadell's Chief Executive Cesar Gonzalez-Bueno said the new offer was "clearly small" and BBVA's chances of success had diminished. The sweetener represented a 1.6% premium to Friday's closing price and institutional investors had expected better terms, he added.
Since April 29, 2024, shares in Sabadell have surged more than 80% while shares in BBVA increased around 50%.
"Given that we have (almost) doubled in value since the takeover bid was made, the board will probably say no, but it is their decision and we will have to wait and see," Gonzalez-Bueno told Spanish TVE state broadcaster.
He said he would not tender his shares to BBVA and Sabadell's board would meet five days after the new terms were approved by the securities supervisor.
BBVA now offers one of its own shares for each 4.8376 Sabadell shares, the equivalent of 3.39 euros per share, its highest in over a decade, compared to 3.084 euros per share or 15.49 billion euros, based on closing prices on September 19 and the previous exchange ratio.
BBVA's board also agreed to waive further adjustments to the deal or extending the 30-day acceptance period.
BBVA'S RETURN IMPACTED BY NEW OFFER, SAY ANALYSTS
Shares in BBVA fell 3% in midday trading, while shares in Sabadell fell around 4%.
"Whilst the offer is still below our price target for Sabadell, we recommend that Sabadell shareholders tender their shares since we think the offer has been positive for Sabadell's share price," Keefe Bruyette & Woods, said in a note to clients.
However, Spanish broker Alantra recommended Sabadell shareholders not accept this new offer as the 10% bump was "not sufficiently compelling."
Increasing the offer by 10% will eat into BBVA's expected return on investment, analysts say.
BBVA guides for around 3% earnings per share accretion from the first year following the merger and a return on investment (ROI) of 17%, from above 5% and above 20%, respectively, under the previous offer terms.
BBVA is also guiding for a capital impact of around minus 21 basis points at the closing of the transaction, or 40 basis points after a one-off dividend by Sabadell following the sale of British unit TSB.
If BBVA withdrew this 50% threshold condition, and it reached between 30% and 50% of Sabadell shareholder acceptance, it would be forced to submit another offer with an alternative in cash, potentially at a higher price.
BBVA said Sabadell shareholders who had already tendered their shares when the acceptance bid started on September 8 would benefit from the improved terms, and that the take-up period would be suspended until the securities supervisor approves the improved offer.
($1 = 0.8520 euros)
(Reporting by Jesus Aguado, editing by Inti Landauro and Bernadette Baum)
