Spanish bank BBVA (NYSE: BBVA) approved the issuance of securities worth as much as 1.5 billion euros ($1.67 billion) convertible into newly issued ordinary shares, the company said on Tuesday.
The value of the new issuance excludes shareholders’ pre-emption rights, the bank said.
The move is aimed at strengthening its capital base as it moves forward with its bid to acquire rival Sabadell in a deal that values the smaller bank at as much as 12 billion euros.
Launched in April, the bid was met with opposition from the government but was approved by the European Central Bank on September 5.
On Wednesday, BBVA (NYSE: BBVA) CEO Onur Genc said the current offer is “very attractive” and would likely convince Sabadell’s shareholders.
Under Spanish law, the government cannot stop the takeover bid but has the final word on allowing a merger between the two entities. The acquisition must also be authorized by Spain’s stock market supervisor and its antitrust watchdog CNMC.
BBVA, Spain’s second-largest bank by market value, expects the CNMC to approve the merger within two months, potentially with some conditions.
($1 = 0.8968 euros)
(Source: ReutersReuters)
