BBVA’s initial offer undervalues Sabadell, says CEO

Sabadell CEO Cesar Gonzalez-Bueno expects BBVA to improve its initial takeover bid for Sabadell Bank, as the current offer undervalues the institution, reported Reuters.

His remarks came following BBVA's official initiation of a takeover bid for Sabadell earlier this week.

Gonzalez-Bueno remarked at a financial event organised by Barclays in New York, “This offer is most probably not the last one, because everybody agrees that this offer lacks merits.”

During the same event BBVA's CEO Onur Genç described the offer as “highly attractive” for Sabadell shareholders.

He noted that it represents the “highest valuation” for Sabadell in over ten years and includes a premium above recent European banking-sector offers.

Since merger discussions became public, the offer's value has increased by 43%, BBVA CEO said.

BBVA proposes an exchange of one common share plus €0.70 ($0.82) in cash for every 5.5483 Sabadell shares.

The proposal's total value rose from €12.2bn on 29 April 2024 to €17.4bn. If accepted, Sabadell shareholders would hold a 13.6% stake in BBVA.

The offer acceptance period is set for 30 days, ending on 7 October.

BBVA anticipates post-merger synergies of €900m annually, 13.5% of the combined cost base of BBVA Spain and Sabadell, excluding TSB, sold to Banco Santander, pending regulatory approvals.

Earlier, Josep Oliu, Sabadell's chairman, reiterated his disapproval of BBVA's offer after having already turned it down in May 2024, and following an initial merger proposal made in 2020.

Oliu said “this offer significantly undervalues Sabadell and its future prospects, and is even less attractive than the initial BBVA bid rejected by the Board in 2024”.

He pointed out that over the last 16 months, Sabadell has delivered greater value and higher returns to its shareholders compared to BBVA.

According to Sabadell, its shares have surged by 108% during this period, while BBVA's shares have only risen by 55%.

"BBVA’s initial offer undervalues Sabadell, says CEO " was originally created and published by Retail Banker International, a GlobalData owned brand.

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