Spain’s second-largest lender, BBVA, is preparing for a prolonged takeover battle after formally launching its €14.8 billion ($17.3 billion) hostile bid for Banco Sabadell. The bank has indicated it may purchase Sabadell shares directly on the market if the current offer fails to deliver control.
Under Spanish takeover rules, BBVA could move to acquire shares on the stock exchange should it end the offer period with a stake between 30% and 50% of Sabadell. Such a scenario would trigger a mandatory subsequent bid, potentially extending the contest for control of the Catalan bank beyond the current calendar.
The hostile bid, formally launched on September 8, proposes one newly issued BBVA share and €0.70 in cash for every 5.5483 Sabadell shares. The package values Sabadell at approximately €14.76 billion, based on recent market prices. If successful, the merger would create Spain’s second-largest domestic lender, with combined assets of around €1 trillion, placing the entity just behind CaixaBank in terms of national market share. Sabadell shareholders have until October 7 to decide whether to tender their shares, with results expected by October 14.
Despite BBVA’s insistence that it will not improve its terms, investor sentiment suggests the market is anticipating a sweeter offer. Since the takeover plan was first announced in April 2024, the share performance of both banks indicates speculation that BBVA may ultimately raise its bid. Legally, the bank retains the option to do so until five days before the acceptance period closes.
BBVA’s willingness to pursue direct share purchases if its initial offer falls short highlights the strategic importance of the deal. For Sabadell, the prospect of absorption by a larger rival raises questions about valuation and independence, while for BBVA, the merger represents an opportunity to consolidate its leadership in Spain’s highly competitive banking sector. As the October deadline approaches, both sides remain under close scrutiny from shareholders, regulators, and the Spanish government, which has already signaled its intent to ensure domestic banking stability during the takeover battle.
