By Jesús Aguado
MADRID (Reuters) -Spanish bank BBVA said on Monday it had raised its bid for smaller rival Sabadell by 10% to 17 billion euros ($19.95 billion), as part of its attempt to create the country’s second-biggest bank by assets.
The sweetener follows a recommendation by Sabadell’s board earlier this month that shareholders reject BBVA’s bid, saying it fundamentally undervalued the bank.
“The consideration will now be entirely in shares, so shareholders with capital gains would not be subject to taxation in Spain, if acceptance exceeds 50% of Banco Sabadell’s voting rights,” it said in a statement.
BBVA’s board also agreed to waive both further adjustments to the deal or extending the acceptance period beyond October 7, with the results in the over-16-month-long takeover battle expected by October 14.
At 0701 GMT, shares in BBVA fell 1.5%, while shares in Sabadell fell 4.2%.
BBVA now offers one of its own shares for each 4.8376 Sabadell shares in what would be Spain’s second-biggest banking deal by assets, the equivalent of 3.39 euros per share.
BBVA had previously offered 1 BBVA share for each 5.5483 Sabadell shares and 0.70 euros in cash, the equivalent to around 3.084 euros per share or 15.49 billion euros based on closing prices on Friday Sept. 19 and the previous exchange ratio.
Mexican David Martinez, the biggest shareholder on Sabadell’s board with a 3.86% holding through Fintech Europe, had said BBVA’s earlier offer was the right strategy but was too low.
BBVA said Sabadell shareholders who had already tendered their shares when the acceptance bid started on September 8 would benefit from the improved terms. It said the take-up period would be suspended until the Spanish securities commission CNMV approves the improved offer.
($1 = 0.8520 euros)
(Reporting by Jesus Aguado, editing by Inti Landauro and Bernadette Baum)
