Spain’s BBVA has set aside €8bn ($9.4bn) in capital to launch a mandatory cash bid for Banco Sabadell, if the shareholders of the latter vote against the proposed €17bn ($19.9bn) acquisition.
BBVA CEO Onur Genc disclosed this in an interview with Reuters.
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This is the latest development in a series of events since BBVA made an offer to acquire Sabadell in April last year.
Last month, the lender revised its acquisition offer, proposing a 10% increase from its previous offer, which valued Sabadell’s shares at €3.39 per share.
The revised bid also secured approval from Spain’s competition authority, the National Securities Markets Commission (CNMC).
However, the board of Sabadell rejected BBVA’s bid. Now, the shareholders’ decision is expected by 10 October.
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By GlobalDataAccording to the Reuters report, if BBVA acquires between 30% and 50% of the shares, a mandatory cash offer to the remaining shareholders will be required to proceed, or the deal will be abandoned.
“If it’s between 30% and 50%, it might, it might not happen. Depends on the take-up, depends on the price, depends on market conditions,” Genc was quoted as saying.
BBVA’s decision to proceed with such an offer would hinge on multiple factors, including the proportion of shareholders required to complete a full buyout of Sabadell.
He also expressed confidence that BBVA would get more than 50% of shares in Sabadell to continue with the all-share takeover bid.
The combination of BBVA and Sabadell would result in one of Europe’s largest lenders, with assets amounting to approximately €1tn.
