Published : 4 months ago, on 05/06/2024

Spain’s BBVA seeks ECB go-ahead for Sabadell hostile bid, source says

By Jesús Aguado

LONDON (Reuters) – Spain’s BBVA asked the European Central Bank on Tuesday to authorize its more than 12 billion euro ($13 billion) hostile bid for Sabadell, a source close to BBVA said.

BBVA’s all-share offer was rejected by Sabadell last month, prompting Spain’s second-largest bank to go hostile in its latest attempt to buy its smaller rival, which is the country’s fourth-largest lender and also owns Britain’s TSB.

“With this submission, BBVA has now completed all the authorization requests, including the UK’s Prudential Regulation Authority,” the source told Reuters.

Combining the two banks, after a failed attempt in 2020, would create a lender with more than 1 trillion euros in total assets and mark the latest consolidation Spanish banking.

Spain’s anti-trust watchdog said on Tuesday that BBVA had sought approval for the Sabadell deal, a potential tie-up that the Spanish government has said it opposes.

BBVA last month asked the stock market supervisor CNMV to authorise its offer of one newly-issued share for every 4.83 Sabadell shares, a premium of 30% over April 29 closing prices.

As shares of BBVA have fallen to 9.4560 euros from 10.90 euros since the offer was announced, the bid premium is now just above 5%, valuing Sabadell at around 10.65 billion euros, according to Reuters calculations. BBVA, which had set itself a minimum approval threshold of 50.01% of Sabadell shares, has said that the process could take six to eight months, before formally going to shareholders.

Under Spanish law, the government cannot stop the process but has the final word on allowing a merger.

($1 = 0.9181 euros)

 

(Reporting by Jesús Aguado; additional reporting by Inti Landauro in Madrid; editing by Tommy Reggiori Wilkes and Alexander Smith)