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Recommendation of the Board of Directors of Banco Sabadell on the revised offer of BBVA’s hostile takeover bid

September 30, 2025

According to the Banco Sabadell Board of Directors’ report:

 

The Board is of the opinion that the takeover bid in progress will obtain a very low level of acceptance. It continues to recommend that its shareholders should not accept it for three
reasons:

01.
The price continues to be significantly lower than the value of Banco Sabadell on its own

The Board has analyzed different valuation methods and considers that Banco Sabadell has an upside potential of up to 26% over the price offered by BBVA.1

BBVA is offering a price very similar to the current Banco Sabadell share price.2

02.
The total remuneration expected for Banco Sabadell shareholders over the next three years is clearly higher

The Banco Sabadell shareholders:

Between 2025 and 2027, Banco Sabadell expects to make dividend distributions and share buybacks for its shareholders of around 40% of its current share price, including an extraordinary cash dividend of 50 cents per share linked to the sale of TSB, which is expected to be paid during the first quarter of 2026.3

 

Shareholders who accept BBVA’s offer:

In contrast, shareholders who accepted the current offer would receive expected dividend distributions and share buybacks that are between 21% and 28% lower during that period.4

 

 

On September 29, 2025, BBVA announced an interim dividend for the 2025 results of €0.32 gross per share. Applying the exchange ratio of the ongoing takeover bid, this interim dividend amounts to €0.066 per Banco Sabadell share, which is less than half of the €0.14 per share interim dividend for 2025 announced by Banco Sabadell (€0.07 already paid in August 2025 and €0.07 expected in December 2025).⁵

 

All of this reinforces Banco Sabadell’s superior ability to remunerate its shareholders at present.

If you accepted BBVA’s hostile takeover bid, you would receive fewer dividends6
Calculate dividends
03.
Accepting the takeover bid now would entail major risks

After studying the composition of Banco Sabadell’s shareholder base and the terms of the current offer, the Board considers that the ongoing takeover bid will achieve a very low level of acceptance. If BBVA were eventually to reach an acceptance level of between 30% and 50% and wished to proceed, it would have to launch a mandatory second takeover bid7. In that case, Banco Sabadell shareholders who had accepted the current offer would:

If they are residents of Spain, those who realize capital gains by accepting the ongoing takeover bid would be required to pay taxes, even if they have not yet received the cash amount.

Having become BBVA shareholders due to the completion of the ongoing takeover bid:8

  • They would not be able to participate in the second takeover bid, which would be 100% in cash at a price no lower8 than that of the first.
  • As BBVA shareholders, they would be affected by the cost of that second takeover bid.
Calculate the possible taxation if you accepted the hostile takeover
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Past returns are not a reliable indicator of future performance. Forecasts are not a guarantee of results. Investing in stocks and shares entails the risk of loss of the capital invested.

The evolution of stock prices and returns is subject to fluctuations due to factors intrinsic to the issuer, its environment, and sector of activity, as well as risks arising from various variables that generally affect the market in which they are traded. This may result in scenarios of both gains and losses, including the possibility of no dividend distribution.

1. The fundamental value of Banco Sabadell is up to 26% higher than that offered by BBVA, based on multiples of PER and P/TBV ratios; PER (Price to Earnings) is the ratio between the market price per share and earnings, and P/TBV (Price to Tangible Book Value) is the ratio between the market price per share and tangible book value, compared with major Spanish banks (Bankinter, Caixabank, Unicaja) and the Gordon Growth Model valuation methodology, as stated in the report approved by the Board of Directors on September 30.

2. Closing share prices as of 30/09/2025: Banco Sabadell €3.30 and BBVA €16.34.

3. Result of dividing the expected distributions by Banco Sabadell to its shareholders for fiscal years 2025–2027 by Banco Sabadell’s market capitalization on September 29, 2025.

4. Result of dividing the expected distributions for Banco Sabadell shareholders who accept BBVA’s offer by the distributions expected by Banco Sabadell to its shareholders, both for fiscal years 2025–2027. Range considers a CET1* ratio of 12–13% for BBVA and the distributions expected by BBVA to its shareholders for fiscal years 2025–2028 totaling €36 billion.

5. Total interim dividend for 2025: (i) Banco Sabadell €0.14/share, (ii) BBVA €0.32/share (equivalent to €0.066/share of Banco Sabadell for shareholders who participate in the exchange).

6. Considers dividends already approved and announced by the entity until October 5, 2025.

7. BBVA could decide to waive the minimum acceptance threshold of over 50%; in such a case, it would be obliged to launch a second takeover bid for all remaining capital with the option of 100% cash payment.

8. Fair price as established in Article 9.2(e) of Royal Decree 1066/2007, of July 27, on the regime of public takeover offers.

*The CET1 ratio is a key banking solvency indicator that measures the proportion of highest-quality capital (Common Equity Tier 1) as a percentage of risk-weighted assets. It is a financial metric banks use to demonstrate their resilience to potential losses. The higher the ratio, the stronger the entity’s solvency.

Learn more about the ‘hostile’ takeover bid

 

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The takeover bid in the media
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FAQs
Dividend yield 2024

In 2024, Banco Sabadell increased the total interim dividend payment to €0.2044 per share, which equates to 11% of Sabadell’s share price at the end of 2024.
Moreover, we will continue to distribute excess capital above 13%

Excess capital: The bank aims to maintain the regulatory capital level at 13% (a key measure of financial soundness). Anything above 13% will be used to remunerate shareholders.