Sabadell’s board rejected a merger proposal by larger rival BBVA 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.
Propped up by higher interest rates and robust profits, European banks are flush with cash and their shares have hit multi-year highs, boosting speculation of more M&A activity, although clinching deals is far from easy.
Last week, 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.
“We regret that the board of Sabadell has rejected such an attractive offer,” a spokesperson for BBVA said on Monday, without elaborating further.
Last week, BBVA said it was ready to “move forward immediately with the transaction” and Chairman Carlos Torres in a letter called on Sabadell’s board to give its assessment of the proposal as soon as possible.
Source: CNBC
