Spain’s BBVA said on Monday that it would be moving ahead with its hostile takeover bid for smaller rival Sabadell, despite the government effectively blocking it from fully merging with its smaller rival for at least three years.
The government said on 24 June that BBVA would not be allowed to integrate its operations with Sabadell for at least three years as one of the conditions imposed on the more than 14 billion-euro bid. The cabinet could extend this condition for another two years, it said. ALSO READ: Spanish government says BBVA must keep Sabadell separate for 3 years as takeover condition.
‘After reviewing (the government) resolution BBVA has decided not to withdraw the offer and, therefore, it remains in effect in accordance with the applicable regulations,’ it said in a filing with the stock market supervisor.
‘We are moving forward with the operation. Despite the conditions imposed by the government, this project generates an enormous value for shareholders of both banks,’ said BBVA president Carlos Torres.
The BBVA president defended the deal as a ‘unique opportunity to build one of the most competitive and innovative banks in Europe’.
Proceeding with the offer means BBVA must comply with the requirements set by the government on grounds of common interest such as protecting workers, protecting companies and protecting financial customers.
Following Madrid’s decision, BBVA said it was reassessing the impact on the expected 850 million euros in cost savings it had previously announced. On Monday, it did not disclose any details.
The bank said that it will now update and publish all relevant information once it obtains approval of the takeover bid prospectus from the Spanish stock market regulator (CNMV).
‘This approval is expected to take place within the coming weeks,’ the bank said.
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