Spain's BBVA increases Sabadell bid to $19.95b in takeover battle

Spanish bank BBVA said on Monday it had raised its bid for smaller rival Sabadell by IO per cent to 17 billion euros ($19.95 billion), as part of its attempt to create the country's second-biggest bank by assets.

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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 per cent of Sabadell's voting rights.

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 per cent 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 per cent while shares in BBVA increased around 50 per cent.

"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.