Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The chair of Spanish lender BBVA told his counterpart at Banco Sabadell that it had “no room” to improve its €12bn takeover offer, according to a private email that the bid target took the unusual step of publishing.
“I consider that it is very important that your board of directors knows that BBVA has no room to improve its economic terms,” Carlos Torres wrote in an email sent to Sabadell’s chair Josep Oliu on Sunday.
The following day Sabadell rejected the offer from BBVA, saying it “significantly undervalues” the growth prospects of the lender, which owns UK high street bank TSB.
The message from Torres was revealed on Wednesday, when Sabadell said it had decided to publish the email “verbatim”.
The all-share offer was initially worth €12bn when unveiled early last week, but its value has slid since then as it triggered a fall in BBVA’s share price.
Torres, who oversaw a previous failed bid for Sabadell in 2020, acknowledged the drop.
“The market has also made it clear that there is no further upside, as BBVA’s market capitalisation has fallen in the period by more than €6bn. This situation absolutely prevents us from being able to pay more premium than we are already offering, because if we were to do so it is foreseeable that our value would fall again.”
BBVA’s market value now stands at just under €60bn compared with the €74bn of Spanish rival Santander.
Torres sought to underscore the generosity of BBVA’s offer, saying it had offered a higher premium than originally planned because Sabadell shares had rallied between mid-April — when BBVA’s board considered making the proposed bid — and April 29 when the offer was made.
“In our proposal we have already used up all the room we had,” he wrote, saying it represented a premium of 48 per cent over where Sabadell shares stood in mid-April.
In rejecting the BBVA bid on Monday, Sabadell said: “The board is highly confident in Banco Sabadell’s growth strategy and its financial targets and is of the view that Banco Sabadell’s standalone strategy will create superior value for its shareholders.”
BBVA declined to comment on Sabadell’s decision to publish the email.
