In major news on Spanish stocks, Banco de Sabadell (ES:SAB) has declined the €12 billion merger offer from its rival bank Banco Bilbao Vizcaya Argentaria (ES:BBVA). In a statement, Sabadell said that the merger proposal grossly undervalues the bank and its growth potential, asserting that it does not align with the best interests of its shareholders.
Sabadell and BBVA are among the leading banks in Spain and offer a complete range of financial services. Year-to-date, Sabadell shares have grown by 64%, while BBVA stock has gained 17%.
BBVA’s Failed Attempts to Acquire Sabadell
On April 30, BBVA made a takeover bid for Sabadell, offering a 30% premium on the closing price of the previous day. BBVA stated that this merger would create a leading financial institution in Europe, exceeding €1 trillion in assets and boasting over 100 million customers worldwide. Additionally, it proposed granting Sabadell shareholders a 16% ownership stake in the merged entity.
BBVA’s latest bid marks its second attempt in less than four years to acquire Sabadell. Earlier in November 2020, these two banks were unable to agree on financial arrangements.
Sabadell Firm on Standalone Strategy
Sabadell affirmed that its board holds strong confidence in its financial objectives and asserts that its standalone strategy will deliver greater benefits for its shareholders.
The company also reaffirmed its dedication to distributing any surplus capital exceeding 13% of the CET1 ratio to its shareholders. The surplus capital expected to accrue throughout 2024 and 2025, alongside recurring dividends, is around €2.4 billion.
What is the Share Forecast for Sabadell?
According to TipRanks, SAB stock has a Hold consensus rating based on three Holds and one Buy recommendation. The Sabadell share price forecast is €1.54, which is 18.4% below the current price level.
