By Jesús Aguado MADRID (Reuters) -Spain's BBVA said on Thursday its hostile takeover bid for smaller rival Sabadell failed as it could not secure at least 30% of its shares in a public tender offer
BBVA's $19 Billion Bid for Sabadell Fails to Gain Shareholder Support
Overview of BBVA's Takeover Attempt
By Jesús Aguado
Details of the Bid
MADRID (Reuters) -Spain's BBVA has failed to convince Sabadell shareholders to back its 16.32 billion euro ($19.07 billion) hostile takeover bid, ending an almost 18-month takeover battle that became one of the country's most contentious deals in recent years.
Market Reaction
It is a blow for BBVA Chair Carlos Torres, the architect of the offer, though he has said he would not resign if it failed.
Future Plans for BBVA
"At BBVA, we look to the future with confidence and enthusiasm," he said in a video on Thursday after acknowledging the bid's failure.
It is the second time in almost five years that a tie-up between BBVA and Sabadell fell through.
Shares in BBVA in the U.S. rose around 7% following the failure of the bid.
BBVA needed to secure support from owners of more than 50% of Sabadell, though it could have lowered the threshold to 30%.
Shareholders of Sabadell tendered just 25.47% of voting rights, data from the market supervisor showed, below even the lower threshold where it could have decided to move on if it had waived the control condition.
The low acceptance level came as a surprise as analysts and investors were expecting a take-up of between 30% to 50%.
BBVA first made its move on Sabadell in April 2024, and the bid turned hostile a month later.
That bid sparked a wave of government opposition and warnings about job losses, leading to a months-long competition review. Eventually, the government intervened and imposed conditions on the deal, blocking BBVA from merging fully with Sabadell for at least three years.
BBVA aimed to become one of the largest lenders in Europe, with about 1 trillion euros in assets to refocus on its home market after years of rapid expansion abroad.
Euro zone banking supervisors have called for banking consolidation to strengthen the sector, but deals have been scarce as politicians have sought to preserve jobs.
BBVA said on Thursday that its board unanimously reasserted its commitment to the new strategic plan.
In July, BBVA presented a four-year plan aiming for accumulated profits of 48 billion euros and shareholder distribution of 36 billion euros without Sabadell.
On Thursday, BBVA said it would immediately resume shareholder remuneration from October 31, when it will start executing a pending share buyback of around 1 billion euros. In November, it will pay a record interim dividend of 0.32 euros per share.
As soon as BBVA receives the authorization from the European Central Bank, it will launch a significant additional share buyback program.
($1 = 0.8555 euros)
(Reporting by Jesús Aguado; Editing by Emma Pinedo, Inti Landauro and Lisa Shumaker)
