Banco Bilbao Vizcaya Argentaria (BBVA), a Spanish bank, caused a stir when it announced a hostile takeover bid for Banco Sabadell, another financial institution on local soil.
BBVA Shakes Up Markets After Announcing Hostile Takeover Bid For Banco Sabadell
According to CNBC, one investment company described the move as “very strange”. BBVA published a notice on its website, stating that its board of directors have offered Banco Sabadell shareholders one BBVA share for every 4.83 shares of Banco Sabadell, constituting a 30% premium on average share prices over the last three months.
BBVA described the transaction as “very positive”. The financial institution made this move after Banco Sabadell’s board rejected a €12bn BBVA offer, stating that this bid “significantly undervalues” Sabadell’s growth potential.
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When the hostile takeover bid became public on Thursday, 9 May 2024, Sabadell reiterated this stance. BBVA indicated that this offer mirrors the terms of the earlier merger proposal and typed it as very lucrative. Carlos Torres Vila, the BBVA chair, said:
We are presenting to Banco Sabadell’s shareholders an extraordinarily attractive offer to create a bank with greater scale in one of our most important markets. Together we will have a greater positive impact in the geographies where we operate, with an additional €5 billion loan capacity per year in Spain.
As markets responded to the public takeover bid, BBVA stock reportedly dropped by 6% at approximately midday in London on 9 May 2024. Sabadell shares, on the other hand, climbed by 3%.
Based on CNBC data, hostile takeovers are not typical in Europe’s banking industry. Carlos Messina, the chief of Intesa Sanpaolo (ISNPY), told this media agent that domestic consolidation is tricky.
