Spanish bank BBVA’s (BBVA.MC), opens new tab shareholders will vote on July 5 on whether to approve a share issue to fund its 12 billion euro ($13 billion) hostile takeover bid for smaller rival Banco Sabadell (SABE.MC), opens new tab.
The bank wants to issue 1.126 billion new shares, which at BBVA’s closing price of 10.9 euros on April 29 – before the bank revealed its Sabadell bid – would be worth slightly more than 12.2 billion euros.
BBVA has offered one newly issued BBVA share for every 4.83 in Sabadell, representing a premium of 30% over Sabadell’s April 29 closing price of 1.73750 euros.
“With this capital increase we take a step in the purchase process with Banco Sabadell’s shareholders,” BBVA’s Chairman Carlos Torres said in a statement.
As shares of BBVA have fallen to 9.97 euros from 10.90 euros since the bid’s announcement, the premium is now just above 6%, valuing Sabadell at around 11.2 billion euros, according to Reuters calculations.
The final amount of the capital increase will depend on the number of Banco Sabadell shareholders who take up the offer.
BBVA, whose approach turned hostile after its smaller rival rejected its initial offer, had set itself a minimum approval threshold of 50.01% of Sabadell shareholders.
($1 = 0.9245 euros)