MADRID – On Tuesday, BBVA (NYSE: BBVA), the Spanish lender, said that it had adjusted its takeover offer for Sabadell to take into account interim dividend payments from both lenders to shareholders to maintain the economic terms of the bid.
In April, BBVA launched a more than 12 billion euro ($13.4 billion) bid for all of Sabadell’s shares, which turned hostile in May.
The bank had said in May when it announced the takeover bid, it would adjust the offer later to reflect dividend payments and add a cash component.
Following Sabadell’s payment on Tuesday of an interim dividend of 0.08 euros against 2024 results, BBVA (NYSE: BBVA) is now offering one newly issued ordinary share for 5.0196 ordinary shares of Sabadell, it said in a filing.
Since BBVA plans to pay an interim dividend of 0.29 euros per share to its own shareholders on October 10, the offer will again be adjusted to one newly issued ordinary share of BBVA and 0.29 euros in cash for every 5.0196 ordinary shares of Banco Sabadell, it added.
Brokers Caixabank and Citi said the offer’s cash component, around 310 million euros, would have an impact on BBVA’s capital ratio of between 7 to 8 basis points on top of the 30 basis points initially announced by BBVA.
BBVA did not disclose the capital impact in its statement on Tuesday and declined to make any comments asked about the estimates from brokers.
At 1225 GMT, shares in BBVA were down 0.4516%, while Sabadell shares were up 0.7285%.
RBC Capital Markets said that as a consequence of the revision, the offer to Sabadell shareholders contained around a 3% fixed cash element, which it expected to increase to 7% by April 2025 based on consensus expectations for BBVA’s 2024 dividend
BBVA (NYSE: BBVA) expects its competition authority to give its approval in less than two months. Its offer was met by opposition from the Spanish government but was given the green light by the European Central Bank on September 5.
The Spanish lender had initially offered one newly issued share for 4.83 Sabadell shares, representing a premium of 30% over the target’s April 29 close.
As BBVA shares have fallen to 9.300 euros as of Tuesday’s closing from 10.90 euros when the offer was first made, the premium is now around 7%, taking into account BBVA’s adjusted offer.
This would value Sabadell at about 10.2 billion euros, taking into account the new number of shares BBVA would have to issue now based on the new exchange ratio, Reuters calculations show.
RBC said in its note that it still expected BBVA’s hostile takeover of Sabadell to be successful, but added that management may increase the offer by up to 10% to help bridge the gap compared to the original offer.
($1 = 0.9030 euros)
(Source: Reuters)
Maria Reed is a financial journalist with a passion for covering US equities. She joined the ABBO News team in June 2023. Maria holds an M.S. degree in International Economics and Finance from Otto-von-Guericke University in Magdeburg and is a CFA Level 2 candidate.
