Takeover battle ends as Sabadell shareholders reject BBVA

(Sharecast News) - BBVA's long-running takeover battle for fellow Spanish bank Sabadell has collapsed, after shareholders rebuffed the hostile �16bn approach.

The lender managed to acquire just 25% of the voting rights in Sabadell, after the remaining investors declined to sell. It needed to secure support from more than 50% to push the deal through.

BBVA chair Carlos Torres acknowledged the bid's failure on Friday, but insisted the bank still looked to the future "with confidence and enthusiasm".

He also told reporters he would not resign, despite being the architect of the failed bid.

BBVA - Spain's third-largest bank by assets - first approached Catalonia-based Sabadell in April 2024, with the aim of becoming one of Europe's largest lenders. The bid turned hostile a month later.

A tie-up would have seen BBVA overtake Santander to become Spain's second-largest lender after CaixaBank.

However, Sabadell - which in July agreed to sell TSB, its UK banking arm, to Santander for £2.7bn - opposed the deal from the onset, arguing that it had a stronger future as a standalone business. The Spanish government also flagged its own concerns, and following a lengthy competition review, imposed stringent conditions on the deal.

In a statement on Friday, chief executive Cesar Gonzalez-Bueno said: "Sabadell is strong than ever now, and has an even better future as an independent bank."

As at 1230 BST, shares in Sabadell had fallen 9%.

Shares in BBVA were trading 3% higher, as investors in welcomed the end of the long-running saga.

Jefferies said: "The transaction reaches a dead end. We now expect management to focus on leaving the best possible after-taste. This involves the potential to distribute around 15% of market cap in the short term, and as much as around 40% to 2028. We expect the shares to reach positively."