Published by Global Banking and Finance Review
Posted on October 6, 2025
By Jesús Aguado, Andres Gonzalez and Tommy Reggiori Wilkes
MADRID/LONDON (Reuters) -BBVA has 8 billion euros ($9.4 billion) in capital for a mandatory cash offer for Sabadell should it fail to convince enough of its smaller rival's shareholders to accept its hostile offer, Chief Executive Officer Onur Genc said.
In an interview with Reuters on Friday, Genc said his base case was that BBVA would get more than 50% of shares in Sabadell to clinch the all-share 17 billion euro ($19.96 billion) takeover offer. Sabadell's shareholders have until October 10 to decide.
If BBVA secures more than 30% but less than 50% of Sabadell shares, it must make a mandatory offer in cash to remaining investors, or walk away from a deal it has been trying to complete since April 2024.
A combined entity would become one of the largest lenders in Europe by assets, with about 1 trillion euros.
Should it decide to make a mandatory cash offer, "we don't need to raise capital in our view", Genc said.
Whether BBVA makes such an offer would depend on several factors, including the percentage of shareholders it would need to buy Sabadell out, he said.
"If it's between 30% and 50%, it might, it might not happen. Depends on the take-up, depends on the price, depends on market conditions," Genc said.
If BBVA needed to buy out 70% of shares in cash, currently with a market value of 11.7 billion euros, the 8 billion euros would not be enough and it would need alternative sources of finance such as raising capital, something its chairman has ruled out.
MOST PROBABLE OUTCOME, ACCORDING TO CITI
Citi assigned a 45% probability that the take-up would be in the 30%-to-50% range.
BBVA's CEO said the bank estimated it would end 2025 with a core tier-1 capital ratio of 13.75%, which would imply excess capital of 7 billion euros above its 12% solvency target, without including the suspended 1 billion euro share buy-back.
Jefferies analysts believe a cash bid for the remaining capital would be more realistic if the take-up rate approaches 50%.
A mandatory offer would be conducted at the same price as the current offer, Genc said, although the fair-value price would be set by the supervisor.
Shareholders of Sabadell are widely dispersed and around 40% are retail investors.
BBVA's chances of clinching the deal improved after it increased the bid and David Martinez, Sabadell's largest individual shareholder, agreed to tender his 3.86% stake although Sabadell's board reiterated that BBVA's improved bid undervalued the lender.
($1 = 0.8514 euros)
(Reporting by Jesús Aguado; Editing by Edmund Klamann)
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