The board of directors of Banco Sabadell officially announced that it rejected the merger proposal made by BBVA. In 2020 he had already ruled it out for the first time.
Banco Sabadell rejected the offer that BBVA had made last week to merge both entities considering that “it will generate more value alone”, as reported by the entity to the National Securities Market Commission of Spain (CNMV). It is the second merger offer that the Catalan entity rejects.
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The decision was announced after the Sabadell board of directors met early this Monday, with the aim of considering BBVA’s offer. As detailed by the entity, They based this resolution on the opinion that they can create greater value for the shareholder if they remain alone.
“Based on the detailed analysis of the Proposal, the Board has concluded that it does not satisfy the interests of Banco Sabadell and its shareholders, and, consequently, has rejected the BBVA Proposal. The Board believes that this decision is, furthermore, , aligned with the interest of Banco Sabadell’s clients and employees,” indicated the Catalan entity in the communication sent to the CNMV.
Last Wednesday, BBVA announced its formal proposal for Sabadell in which it proposed an exchange of 1 newly issued BBVA share for every 4.83 Sabadell shares, with a 30% premium over the value at which Sabadell was listed on Monday, April 29.
This offer meant valuing Sabadell at around 11,000 million euros, following the price at which BBVA closed today of 9.84 euros per share. In turn, it implies raising the value of the share in Sabadell to 2.2 euros – it is currently trading at around 1.89 euros per share -, taking into account the 30% premium.
BBVA and Sabadell already negotiated a merger in 2020. At that time the talks failed due to discrepancies regarding the valuation of the Catalan bank. The truth is that the market has doubted from the beginning that the transaction will come to fruition.
According to industry estimates, if the merger is completed, the new entity would have total assets greater than 1 billion euros and more than 100 million customers worldwide. Thus, it would become one of the largest and most solid financial entities in Europe, with the ambition of being the largest bank by market capitalization in the entire euro zone.
BBVA could thus become the third largest bank in the eurozone by market capitalization, estimated at approximately 65 billion dollars (61 billion euros), only behind BNP Paribas and Banco Santander. A scenario that now, after Sabadell’s rejection, will not happen for the moment.
