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Banco Sabadell Rejects Rival BBVA Merger Proposal

By  |  May 6, 2024
BBVA

The board of Banco Sabadell (SABE.MC) has taken a firm stance against a proposed merger with BBVA (BBVA.MC), citing undervaluation and market volatility. In a statement released on Monday to the Spanish stock market supervisor, Sabadell announced its rejection of BBVA’s 12 billion euro ($12.93 billion) all-share merger offer.

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    According to Sabadell, the board believes that the proposal significantly undervalues the bank’s potential and its prospects for standalone growth. The offer, deemed unsolicited, did not meet the expectations of Sabadell’s leadership in terms of valuation and strategic alignment.

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    Moreover, Sabadell expressed concerns regarding the recent decline and volatility in BBVA’s share price, which further complicates the assessment of the proposal’s value. The board highlighted the increased uncertainty surrounding the merger offer in light of these market fluctuations.

    Related: BBVA Pursues Merger Talks with Banco Sabadell

    BBVA, in response to Sabadell’s rejection, clarified that it had proposed an exchange ratio of 1 newly issued BBVA share for every 4.83 Sabadell shares. This offer represented a premium of 30% over the closing prices on April 29.

    The divergence in perspectives between the two Spanish banking giants reflects the complexities involved in strategic mergers within the financial sector. While BBVA sees potential synergies and benefits in combining forces with Sabadell, Sabadell’s board remains steadfast in its belief in the bank’s standalone growth trajectory and value proposition.

    Source: XM