By Jesús Aguado
MADRID (Reuters) -Sabadell’s board rejected a merger proposal by larger rival BBVA (BME:) for a 12 billion euro ($12.93 billion) all-share merger, the Spanish lender said on Monday.
The country’s fourth-largest lender by market value said its board believed BBVA’s proposal significantly undervalues the potential of Banco Sabadell and its growth prospects, calling the offer unsolicited.
On Wednesday, BBVA had offered an exchange ratio of one newly issued BBVA share for every 4.83 Sabadell shares, a premium of 30% over April 29 closing prices.
In a statement to the stock market supervisor on Monday, Sabadell said the recent material decline and volatility in the BBVA share price increased the uncertainty around the value of the proposal.
BBVA was not immediately available for a comment.
Based on the May 6 closing prices of 9.840 euros for BBVA and 1.8895 euros for Sabadell, shares in Sabadell were well below the 2.2587 euros per share BBVA was offering taking into account the 30% premium against April 29.
With today’s closing price, BBVA was valuing Sabadell at around 11 billion euros.
Analysts said the gap between the offer and the current share price of Sabadell indicated there was risk that the deal would not go through.
In November of 2020, Sabadell and BBVA called off merger talks as they did not agree on the terms, including the price tag.
($1 = 0.9281 euros)
