Spain’s stock exchange regulator assesses BBVA’s application for $13 billion Sabadell deal
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Spain’s stock exchange regulator assesses BBVA’s application for $13 billion Sabadell deal

Author: Jesus Aguado

MADRID (Reuters) – Spain’s stock exchange regulator said on Tuesday it had started assessing BBVA’s 12.28 billion euro ($13.19 billion) hostile takeover bid for Sabadell, a potential tie-up that Madrid opposes.

The National Securities Market Commission (CNMV) said it had granted BBVA’s request to approve the transaction, which is part of the regulatory process for approving the transaction.

“The admission of the application for consideration does not constitute any declaration regarding the decision to approve the takeover offer,” the supervisor said in a statement.

The transaction also requires approval from the European Central Bank and the Spanish antitrust authority CNMC.

Last month, Sabadell rejected BBVA’s all-share offer, prompting Spain’s second-largest bank to turn hostile in its latest attempt to buy the country’s fourth-largest lender after a failed attempt in 2020.

The combined group will overtake Caixabank as Spain’s largest bank in terms of domestic assets, marking the latest chapter of consolidation efforts in the Spanish banking sector.

The Spanish government opposes the planned merger because it believes that the merger of the two banks would have potentially harmful effects on the Spanish financial system and would impact jobs and customers.

Before it formally goes to shareholders, BBVA will try to convince regulators of the validity of its offer.

BBVA expects the regulatory process and tender period to take up to eight months.

On Monday, BBVA CEO Carlos Torres called on shareholders to attend an extraordinary meeting on July 5 called to approve the issuance of shares to finance Sabadell’s takeover bid.

In a note to clients on Tuesday, broker Keefe, Bruyette & Woods said the offering would help BBVA by reducing its exposure to emerging markets.

“Some investors still believe that BBVA should not engage in mergers and acquisitions, but we believe Mr. Torres deserves confidence on this matter,” the broker said.

It recommended that BBVA shareholders approve the capital increase at the EGM.

Since April 29, the day before BBVA first announced its interest in exploring a potential merger with Sabadell, BBVA’s shares have fallen 12% and Sabadell’s shares have risen by approximately 7%.

($1 = 0.9308 euros)

(Reporting by Jesús Aguado, editing by Inti Landauro, Shinjini Ganguli, Tomasz Janowski and Susan Fenton)