Makes a “hostile bid” of 135 billion – E24

The stage is set for an unusual billion-dollar battle in the Spanish banking sector. Now the finance minister has also come on board.

Earlier this week, Banco de Sabadell rejected a bid from Spain’s second largest bank, Banco Bilbao Vizcaya Argentaria (BBVA). The board believed that the bid of 11.5 billion euros (135 billion kroner) “significantly underestimates” the bank’s potential.

But instead of accepting the rejection, BBVA has now chosen a rather unusual strategy.

The bank announced on Thursday that it will submit the same bid directly to the shareholders of the company, a so-called “hostile bid”.

The move paves the way for a billion-dollar battle in a country where there have been only a handful of “hostile bids” in the past 25 years, writes the Financial Times.

– We are presenting the shareholders of Banco Sabadell with an extraordinarily attractive offer to create a bank with a larger scale in one of our most important markets, says BBVA Chairman Carlos Torres Vila in a press release.

Banco Sabadell has not yet commented on the surprising development. On the other hand, the Ministry of Finance has, which cannot be said to be particularly positive about the situation.

Finance Minister Carlos Cuerpo emphasized in an interview with TVE on Thursday that the authorities have the last word in the matter, and that they oppose the “form and substance” of how BBVA plans to buy the competitor, according to Bloomberg.

On top of it all, the offer comes a few days before the regional elections in Catalonia. Banco Sabadell has roots back to the region, and local politicians have, according to the news agency, expressed concern over BBVA’s attempt to buy the bank.

The shares of the two banks have gone their separate ways on the stock exchange on Thursday. The BBVA share falls around six percent, while the Banco Sabadell share is up around three percent at 5 p.m.