BBVA Sweetens Offer for Sabadell With All-Share Bid Valued at $20 Billion — Update

By Elena Vardon and Adria Calatayud

Spain's BBVA increased its hostile takeover bid for Banco de Sabadell by 10%, dropping a cash component and improving terms for an all-stock offer that values the target at 17 billion euros ($20 billion).

BBVA is looking to win over shareholders in its smaller rival despite opposition from Sabadell's board ahead of the closure of the offer period next month, with a revised bid that it doesn't plan to increase again or extend.

Banco Bilbao Vizcaya Argentaria--as the bank is formally known--went hostile in its pursuit of Sabadell in May last year with the aim of creating one of the biggest lenders in the eurozone. BBVA is Spain's second largest bank by assets but makes the bulk of its business in emerging markets like Mexico and Turkey, and set its sights on Sabadell--which ranks in fourth position--to bolster its presence in its home market.

Sabadell's management has fiercely opposed the bid, which it has repeatedly said undervalues the Catalan lender and recommended shareholders not to tender their shares to the offer.

BBVA said Monday that it is now offering to exchange one BBVA share for every 4.8376 ordinary Sabadell shares held, compared with its previous bid of one BBVA share and 0.70 euros in cash for every 5.5483 Sabadell shares.

The revised offer values Sabadell at 17 billion euros based on Friday's closing prices, or 3.39 euros a share. The new terms represent a 1.6% premium to Sabadell's Friday closing price of 3.34 euros, and compares with a valuation of 3.08 euros a share under the prior offer.

Shares in both banks traded in the red in European morning trading, with Sabadell down 3% while BBVA slipped 1.5%.

The initial all-stock bid valued Sabadell at 12.2 billion euros when it was first floated, though this has fluctuated as the takeover battle dragged on for more than a year amid several regulatory reviews. The exchange ratio was also adjusted to account for dividend payments.

Dropping the cash component addresses one concern of Sabadell retail shareholders as it allows those with capital gains not to be subject to tax in Spain if the acceptance level exceeds 50% of voting rights, BBVA said.

Sabadell has a large base of retail investors and their decision on whether or not to tender their shares to the offer will be key to the success or failure of the transaction. An association of minority Sabadell shareholders had previously said it considered the offer too low, calling it offensive.

Though the deal has faced several hurdles, BBVA has powered through. The Spanish government said it would only give its green light to move forward if a legal merger of the two banks was banned for at least three years--a period in which their entities and assets would have to be kept separate and operate independently.

Despite that setback and Sabadell's sale of its U.K. unit TSB--which will result in an extraordinary dividend payout--BBVA decided to stick with the transaction, saying it still sees value despite the risks.

BBVA had previously said that it didn't intend to improve the offer, though some analysts had estimated that a top up would be necessary to push the deal over the line. On Monday, the BBVA board ruled out making any further improvements to the offer's price and extending the acceptance period, which opened on Sept. 8 and runs until Oct. 7.

"The revised offer is fair and not totally unexpected, and sufficiently attractive for the majority of [Sabadell] shareholders to accept, in our view," RBC Capital Markets analyst Benjamin Toms said in a note to clients.

However, Alantra analyst Francisco Riquel said a 10% bump isn't sufficiently compelling and that matching Sabadell's market price isn't a game changer.

Write to Adria Calatayud at adria.calatayud@wsj.com and to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

September 22, 2025 05:00 ET (09:00 GMT)