- ORIGINAL NEWS
A rare hostile takeover bid in Europe’s banking sector has shocked markets
- SUMMARY
In a surprising move, Spanish banking giant BBVA has launched a hostile takeover bid for its rival, Banco Sabadell.
This comes after Sabadell’s board rejected BBVA’s initial offer, deemed to be undervalued.
BBVA’s unsolicited bid, presented directly to Sabadell shareholders, matches the financial terms of their earlier proposal.
If successful, the merger would create Spain’s second-largest financial institution.
Despite the allure of the offer, Sabadell’s board remains steadfast in its belief that their standalone strategy holds more value.
Hostile takeover bids are uncommon in European banking, making BBVA’s approach unprecedented.
It has prompted reactions from industry experts, with some speculating that such consolidation is a result of smaller European lenders lagging behind their American counterparts.
While BBVA presents its offer as highly favorable for Sabadell shareholders, the Spanish government has expressed disapproval, citing concerns about the impact on the financial system.
Despite these reservations, experts believe the deal has a good chance of success, based on the premium it offers over Sabadell’s current market value.
Financial analysts have been taken aback by BBVA’s audacious move, describing the situation as “very strange.”
The outcome of this hostile takeover bid remains to be seen, but it has undoubtedly shaken up the Spanish banking landscape and raised questions about the future of consolidation in the European banking sector.
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“BBVA Chair Carlos Torres Vila said in a statement.”
“BBVA said its takeover offer has the same financial terms as the merger offered to Sabadell’s board. It characterized the proposal — which would create Spain’s second-largest financial institution if successful — as “extraordinarily attractive””
“Shares of BBVA fell 6% at around midday London time on Thursday, while Sabadell’s stock price rose more than 3%.”
“Carlo Messina, CEO of Italy’s biggest bank Intesa Sanpaolo, told CNBC on Wednesday that there were significant challenges to domestic consolidation within the region’s banking sector. He said it was difficult to complete a “friendly transaction” in the current market environment, whereas proceeding with a hostile takeover bid was also “not so easy to do””