BBVA Boosts Sabadell Bid to €17 Billion, But Deal Faces Hurdles
BBVA has sweetened its takeover bid for Banco Sabadell to €17 billion ($20 billion), but the deal faces hurdles. Sabadell's board and major shareholders are critical, and regulators are watching closely.
BBVA's revised offer is an all-share proposal, removing the earlier cash component. This change comes after the European Commission warned Spain against imposing disproportionate conditions that could breach EU rules. Despite the increase, Sabadell's CEO, César González-Bueno, has criticized the bid for lacking a sufficient premium and exposing shareholders to risks.
The deal requires more than half of Sabadell's shareholders to accept. If they do, they won't pay capital gains tax immediately. However, major asset managers like BlackRock, Vanguard, and Norges have not yet declared their positions. Crucially, Zurich Insurance Group, Sabadell's second-largest shareholder with nearly 5%, has announced it won't tender its shares, viewing the offer as unattractive compared to Sabadell's prospects as an independent entity.
Spain's government has mandated that BBVA and Sabadell remain separate legal entities for at least three years post-acquisition. The deal has been approved by Spain's National Securities Market Commission and is heading towards the October 10 shareholder deadline.
BBVA's increased offer for Sabadell faces uncertainty as key shareholders and regulators weigh in. The deal's success hinges on more than half of Sabadell's shareholders accepting the offer, with major asset managers' positions still unclear. If approved, the merged entity would see Sabadell's shareholders own a 15.3% stake.
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