A PROPOSED merger between Banco Sabadell and the BBVA has been rejected by the Sabadell board on the grounds that it ‘significantly undervalues’ the bank and its growth prospects.
In a statement, the Sabadell board said that it has full confidence in its growth strategy and its financial objectives, and is of the view that remaining independent will generate more money for its shareholders.”
News of the merger proposal became public last week and would have expanded BBVA’s position as Spain’s second largest bank behind Santander and increasing its lead over CaixaBank.
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In terms of assets, Banco Sabadell is the fourth largest in the country.
Experts don’t rule out BBVA coming back with an improved offer but more likely believe they will turn their eyes to smaller entities like Bankinter or Unicaja.
Expanding on its reason for rejecting the BBVA merger, Sabadell highlighted a fall in BBVA’s share price and believes its rejected is ‘aligned with the interest of its customers and employees’.
One fear was that if a merger happened, yet more bank branches would close as has been the case over the last few years.
BBVA had valued Sabadell at €12 billion and would also have scrapped the Sabadell name under the proposed union.
In a video address on Tuesday to Sabadell staff, the chairman, Josep Oliu, said: “The bank is a strong institution with a future, a great entity and I thank you all.”
“I want to thank you for the great work you have done for so many years and that I am convinced you will continue to do so from here on out.”
Sabadell CEO, Cesar Gonzalez-Bueno, highlighted the board’s support for the bank’s growth plans.
“We are not going to disappoint you. The trust you put in us is a stimulus to continue improving even more,” he said.
He also encouraged employees to carry as normal, indicating that ‘together we will make Banco Sabadell bigger, more powerful and more profitable in the future’.
Sabadell and BBVA had merger talks in 2020 which came to nothing.