Investing.com -- Spain's BBVA (BME:BBVA) has launched a hostile takeover bid for peer Banco Sabadell, taking the offer directly to Sabadell's shareholders days after the target's board rejected a proposed deal.
On Monday, Sabadell argued that BBVA's unsolicited bid "significantly undervalued" its growth potential. The offer valued Sabadell at about 12 million euros, although that price has declined due to a slide in BBVA shares.
BBVA has now moved to bring the all-share proposal, which would see BBVA offer one of its shares for every 4.83 of Sabadell, to Sabadell's stakeholders, saying in a statement on Thursday that the tie-up would be "exceptionally favorable."
“We are presenting to Banco Sabadell’s shareholders an extraordinarily attractive offer to create a bank with greater scale in one of our most important markets," said BBVA Chair Carlos Torres Vila.
BBVA added that the deal would create a banking group that will oversee more than a fifth of Spain's loan market share.
Spain's government has opposed the hostile takeover bid, according to media reports. Madrid is concerned that the deal could hit Spain's financial system and impact jobs and customers, Reuters reported, citing a government source.
Shares in BBVA fell by more than 5% on Thursday, while Sabadell shares climbed over 3%.
The two lenders previously attempted to negotiate a merger in 2020, but the talks collapsed with both sides in disagreement over pricing.