Sabadell rejected BBVA bid over capital impact, costs savings, CEO says

By Jerry  Published On May 16, 2024
MADRID, May 16 (Reuters) – Spanish lender Sabadell rejected BBVA’s takeover offer because the bigger bank had underestimated its negative effect on capital reserves and overestimated cost savings from a deal, Sabadell’s CEO said in his first public comments on the takeover.
The impact on capital ratio would be “significantly higher than the 30 basis points” foreseen by BBVA, Cesar Gonzalez-Bueno told a banking event a week after BBVA launched a hostile 12.23 billion euro ($13.1 billion) all-share takeover.
The surprise move triggered immediate opposition from the government.
Sabadell’s board had rejected an earlier merger proposal by BBVA before it took it directly to the shareholders of its smaller rival.
In its proposal, BBVA estimated annual cost savings at about 850 million euros ($923.27 million) before tax, spread over three years.
“In the case of the combined entity the board studied several considerations, and the first was whether significant cost synergies were applied,” Gonzalez-Bueno said. However, the board did not take into account potential negative commercial effects of the potential deal, he said.
Source: REUTER

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