Spanish bank Sabadell rejects $12.9 billion BBVA merger proposal

Last week, BBVA proposed a merger with Sabadell, offering an exchange ratio of one newly issued BBVA share for every 4.83 Sabadell shares. The offer included a 30% premium over the closing prices on April 29. However, Sabadell’s board rejected the proposal, stating that it significantly undervalued the bank and its growth prospects. The rejection emphasized Sabadell’s confidence in its standalone strategy and commitment to distributing excess capital to shareholders. The market’s response showed a decline in BBVA’s share price while Sabadell’s shares rose. Analysts believe the gap between the offer and Sabadell’s share price could jeopardize the deal.