Background on BBVA and Sabadell
BBVA, a prominent Spanish banking group, has announced an increased takeover offer for its competitor, Banco de Sabadell. The new offer values Sabadell at approximately $19.95 billion, aiming to establish BBVA as the second-largest bank in Spain based on assets.
Sabadell’s Initial Resistance
Earlier this month, Sabadell’s board of directors advised shareholders to reject BBVA’s initial offer, arguing that it significantly undervalued the bank. The original proposal from BBVA included one of its shares in exchange for 5.5483 Sabadell shares and $3.084 per Sabadell share, totaling around $15.49 billion.
BBVA’s Revised Offer
In response to Sabadell’s resistance, BBVA has revised its offer. The new proposal entails exchanging one BBVA share for 4.8376 Sabadell shares, making it the second-largest banking merger in Spain by assets.
Key Changes in BBVA’s Offer
- Entirely in Stock: BBVA’s revised offer is entirely in stock, meaning that shareholders who accept and have capital gains will not pay taxes in Spain if acceptance surpasses 50% of Sabadell’s voting rights.
- No Further Improvements or Extension: The BBVA board has agreed to forgo any further enhancements to the offer and extending the acceptance period beyond October 7. The outcome of this prolonged 16-month acquisition battle is expected to be revealed on October 14.
- Benefits for Early Accepters: Shareholders of Sabadell who offered their shares when the acceptance period began on September 8 will benefit from the improved conditions. The acceptance period will be temporarily suspended until Spain’s National Securities Market Commission (CNMV) approves the improved offer.
David Martínez’s Role
David Martínez, a significant shareholder of Sabadell with a 3.86% stake through Fintech Europe, had previously stated that BBVA’s initial offer was strategically correct but too low. His stance influenced Sabadell’s initial rejection of BBVA’s proposal.
Key Questions and Answers
- What is the new offer from BBVA for Sabadell? BBVA now offers one of its shares in exchange for 4.8376 Sabadell shares, valuing the merger at approximately $19.95 billion.
- Why did Sabadell initially reject BBVA’s offer? Sabadell’s board believed that BBVA’s initial proposal significantly undervalued the bank.
- What changes have been made to BBVA’s offer? The new offer is entirely in stock, and BBVA has abandoned any possibility of further improvements or extending the acceptance period.
- Who is David Martínez, and why is he relevant? David Martínez is a major Sabadell shareholder with a 3.86% stake through Fintech Europe. His opinion influenced Sabadell’s initial rejection of BBVA’s offer.
