Sabadell says 2.8% of investors holding a third of shares in bank accept BBVA's bid
![Item 1 of 2 A woman uses an ATM machine as people leave a Sabadell bank office in Barcelona, Spain, September 7, 2021. REUTERS/ Albert Gea [1/2]A woman uses an ATM machine as people leave a Sabadell bank office in Barcelona, Spain, September 7, 2021. REUTERS/ Albert Gea Purchase Licensing Rights, opens new tab](/_next/image?url=https%3A%2F%2Fwww.reuters.com%2Fresizer%2Fv2%2FXEKOXLB2YBJHDASWPDGUJDZ7Y4.jpg%3Fauth%3D6c34d2f4615b5eb8a9afe11ad611682812ee99ea9770469038cebafee0ea63b3%26width%3D1200%26quality%3D80&w=1920&q=75)
News Summary
Sabadell announced on Tuesday that 2.8% of its shareholders, representing 30.8% of the bank's capital, have accepted BBVA's 16.48 billion euro ($19.07 billion) hostile takeover bid. This partial acceptance accounts for 1.1% of Sabadell's total share capital. Approximately 40% of Sabadell's capital is held by retail shareholders, with about 80% also being bank clients. Its 20 largest shareholders are international institutional investors, with BlackRock being the largest, owning around 7%. BBVA aims to secure at least 50.01% support from Sabadell shareholders but can lower the threshold to 30%. Should BBVA lower the condition to 30%-50% and succeed, it would be required to submit a second mandatory cash offer for the remaining shares. Sabadell CEO Cesar Gonzalez-Bueno previously anticipated BBVA might not initially reach the 30% threshold, while BBVA CEO Onur Genc expressed confidence in reaching 50%. BBVA has already improved its bid, now offering a 1.85% premium to Sabadell's share price.
Background
BBVA's hostile takeover bid for Sabadell, initiated in May 2024, has escalated into one of Spain's most contentious M&A battles in recent years. The Spanish government has voiced strong opposition to the merger, citing concerns over excessive market concentration and potential risks to financial stability. The proposed merger aims to create one of Europe's largest lenders. Sabadell shareholders had until October 10, 2025, to accept BBVA's offer, with the Spanish stock market supervisor expected to publish the complete bid results later this week.
In-Depth AI Insights
Why is the initial acceptance rate so low, and what does it signal about shareholder sentiment and the bid's prospects? - Institutional investors often delay tendering shares until the final days of an offer or may be holding out for a higher price. Retail investors might exhibit greater loyalty to Sabadell as clients or be less informed about the bid's implications. - This low initial take-up suggests significant resistance, potentially emboldening the Spanish government's stance against the deal. It increases the probability that BBVA will fail to meet its preferred 50.01% acceptance threshold, forcing it to consider a lower threshold or abandon the bid altogether. What are the strategic implications for BBVA if it proceeds with a lower acceptance threshold (30-50%) and a mandatory second cash offer? - Proceeding with a lower threshold would likely mean BBVA initially acquires a non-controlling stake, creating integration challenges and governance complexities as Sabadell would still have a significant independent shareholder base. - A mandatory second cash offer could increase the acquisition cost, especially if the supervisor sets a fair value higher than BBVA's expectations, impacting BBVA's balance sheet and diluting the intended synergies. This complicates and lengthens BBVA's path to full control and realizing the strategic benefits of creating a larger European lender. Beyond the immediate financial terms, what are the broader systemic and competitive concerns driving the Spanish government's opposition to this merger? - The Spanish government's opposition likely stems from concerns about reduced competition within the Spanish banking sector, potentially leading to higher costs for consumers and businesses for banking services. There are also systemic risk concerns, as a larger combined entity could be deemed "too big to fail," posing a greater threat to financial stability during future crises. - Furthermore, the government may seek to avoid an overconcentration of the domestic banking system into a few large players, aiming to preserve a healthy competitive landscape and diversity of banking services.