BBVA’s Hostile Takeover Bid for Sabadell: A Complex and Challenging Process with Implications for Both Banks and Shareholders

BBVA has launched a hostile takeover bid for Sabadell, valuing the bank at nearly 11.6 billion euros. The offer involves exchanging 1 BBVA share for every 4.83 Sabadell shares, despite Sabadell’s board viewing this as an undervaluation of the bank’s worth. The Spanish Government has rejected the takeover bid, citing concerns over the impact on banking concentration and territorial cohesion. With no controlling shareholder in Sabadell, the majority of its shares are held by large investment funds and retail investors.

Sabadell remains firm in its decision to remain independent, despite BBVA’s attractive offer presented by President Carlos Torres. The ongoing hostilities between the two banks have escalated in recent days, with both sides expressing strong opinions on the proposed merger. The takeover bid process will involve regulatory approvals and shareholder decisions, potentially lasting more than six months.

The Sabadell board faces restrictions on defensive actions, limiting their ability to respond to the bid. BBVA must adhere to the regulatory process and gain approval from various authorities before the offer can be completed. The outcome of the takeover bid will have significant implications for both banks and their shareholders, as they navigate this complex and challenging process.