**Sabadell CEO Rejects BBVA’s Acquisition Offer as Insufficient**
Banco Sabadell SA’s CEO, Cesar Gonzalez-Bueno, has stated that BBVA SA’s acquisition proposal is too low to be viable, dampening hopes for the creation of a major Spanish banking entity. In a recent interview, Gonzalez-Bueno emphasized, “At this price, it’s impossible for this to work.” He outlined two paths for BBVA following Sabadell’s rejection: either significantly enhance the offer or withdraw it altogether.
Since BBVA’s initial bid in May 2024, Sabadell’s stock has surged, strengthening Gonzalez-Bueno’s position against the unsolicited offer. This rise in share value has garnered some backing from the Spanish government, led by Prime Minister Pedro Sanchez. BBVA’s proposal includes one newly issued share and €0.70 in cash for every 5.3456 ordinary shares of Sabadell, valuing the bank at approximately €13.6 billion, compared to its current market value of €15.6 billion. Sabadell’s shares have increased by 70% since news of BBVA’s interest emerged in April 2024, outpacing BBVA’s own 20% gain and placing Sabadell’s stock at a 15% premium over the offer price.
KBW analyst Hugo Cruz noted that for BBVA to successfully acquire Sabadell, it would likely need to raise the cash component to around €1.00 per share, which would amount to about €5.3 billion. Gonzalez-Bueno hinted at challenges in raising the offer, reflecting BBVA Chairman Carlos Torres’ previous caution regarding the potential impact on BBVA’s share price.
In a strategic move, Sabadell, the fourth-largest bank in Spain by assets, has agreed to sell its UK unit, TSB, and has committed to returning €6.3 billion ($7.4 billion) to shareholders over the next three years. This situation mirrors recent events in Italy, where government resistance thwarted UniCredit SpA’s unsolicited bid for Banco BPM SpA, complicating CEO Andrea Orcel’s plans to reshape the European financial landscape. The European Commission has criticized both Italy and Spain for their involvement in such deals, as government interventions may violate EU regulations on capital movement.
Despite these challenges, Gonzalez-Bueno indicated that he does not foresee risks if BBVA’s bid were to succeed, describing the proposed transaction as “neutral” in that regard. The Spanish government has informed BBVA that full integration with Sabadell would not be permitted for at least three years if the merger proceeds, a condition that Gonzalez-Bueno believes would nullify the anticipated synergies of the deal.
He remarked, “It’s perfectly reasonable and honorable to change your mind when a transaction no longer makes sense,” and added that he does not believe Orcel’s reputation has been tarnished by UniCredit’s recent difficulties. In its defense strategy, Sabadell has also engaged in informal discussions with Unicaja Banco SA shareholders regarding a potential merger and has explored options with Abanca.
**FAQ**
**Q: What is the current status of BBVA’s acquisition offer for Sabadell?**
A: BBVA’s acquisition offer for Sabadell has been rejected as too low, with Sabadell’s CEO stating that a significant increase in the offer is necessary for it to be considered viable.
