A takeover bid is a formal process by which an investor makes an offer directly to the shareholders of a listed company to acquire their shares.
The takeover bid announced by BBVA on 9 May 2024 is a bid addressed directly to Banco Sabadell shareholders to acquire their shares, offering in exchange newly issued BBVA shares based on a certain exchange equation (1 newly issued BBVA share + €0.70 in cash for every 5.5483 Banco Sabadell shares).
The takeover bid is considered hostile because it has been submitted by BBVA without prior agreement with Banco Sabadell’s Board of Directors.
Shareholders may make their decision from September 8 to October 7, when the acceptance period ends.
On September 12, the Board of Directors of Banco Sabadell issued a report evaluating the offer and unanimously recommended that its shareholders reject BBVA’s takeover bid, as it significantly undervalues its project and growth plans.
Prior to the announcement of the takeover bid, the Board of Directors of Banco Sabadell rejected merger proposal received from BBVA on 30 April 2024 (under the same economic conditions later set out in the takeover bid).
The Board of Directors of Banco Sabadell rejected the proposal, as it significantly undervalued Banco Sabadell’s project and its growth prospects as an independent institution. The Board of Directors expressed its full confidence in Banco Sabadell’s growth strategy and financial goals, believing that Banco Sabadell’s strategy as an independent institution would generate greater value for its shareholders. It also indicated that the significant fall and volatility of BBVA’s share price in the days prior to the rejection of the proposal led to additional uncertainty about the value of the proposal.
Based on a detailed analysis of the proposal, the Board of Directors concluded that the offer was not in the interest of Banco Sabadell or its shareholders, and consequently rejected BBVA’s proposal.
The Board of Directors added that it believed its decision was in line with the interests of Banco Sabadell’s clients and employees.
