May 14, 2024 | Financials | Europe | Active

Banco de Sabadell / BBVA: Deal Insight

On 30-Apr-24, Banco Bilbao Vizcaya Argentaria (BBVA) confirmed ongoing discussions with the board of its smaller domestic rival, Banco de Sabadell, regarding a potential merger, and further disclosed the appointment of advisers. The following day, BBVA presented an indicative proposal to Sabadell’s board, suggesting an exchange ratio of 1 BBVA share for every 4.83 Sabadell shares; the ratio – equivalent to 1 SAB SM = 0.2070 BBVA SM – implied a 30% premium to Sabadell’s undisturbed price on 29-Apr-24. The offer consideration will be adjusted for any dividends, and upon completion, it is envisioned that Sabadell shareholders would own 16% of the combined entity, with BBVA shareholders retaining the remaining 84%. However, on 7-May-24, Sabadell rejected BBVA’s proposal, citing undervaluation. BBVA promptly shifted to a hostile approach, and upon receiving board approval on 8-May-24, it announced plans to launch a takeover offer directly to Sabadell shareholders on 9-May-24, at the previously outlined terms. BBVA intends to file with Spain’s financial industry regulator, the Spanish National Securities Market Commission (CNMV), within the first half of the maximum one-month period, indicating a filing later this month. To satisfy certain laws concerning the regulation, supervision and solvency of credit institutions, the CNMV can only approve ...

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