BBVA increases Banco Sabadell offer

(Sharecast News) - Spanish financial services giant BBVA has raised the terms of its takeover bid for Banco Sabadell by roughly 10%, offering one share for every 4.8376 Sabadell shares, valuing the smaller lender at approximately €17bn - a 1.6% premium to its market value at Friday's close. The revised all-share offer marked a shift in tone from BBVA, which had previously insisted its initial bid was fair and final, and comes despite Sabadell shareholders voting overwhelmingly in August to approve the €2.5bn sale of its UK subsidiary TSB to Banco Santander, a deal seen as strengthening Sabadell's standalone prospects.

BBVA's earlier offer, comprising one share and €0.70 in cash for every 5.5483 Sabadell shares, had valued the bank at €15.5bn - an 8% discount to its then market value. Sabadell's board rejected the original proposal, arguing it undervalued the group's potential.

BBVA has reiterated its belief that the merger would create long-term value for both sets of shareholders, despite a government-imposed restriction that would prevent full integration for several years, a delay that was expected to limit near-term cost synergies.

A successful merger of the two would create one of Spain's largest banking groups, with BBVA currently ranked second by assets and Sabadell fourth.

As of 0850 BST, BBVA shares were up 4.1% at €16.14 each, while Sabadell shares were 4.01% lower at €3.21 each.







Reporting by Iain Gilbert at Sharecast.com