Core Viewpoint - The board of Spanish lender Sabadell has issued an unfavorable recommendation regarding BBVA's hostile takeover bid, stating that the offer undervalues the bank [1] Company Summary - Sabadell's board believes that BBVA's bid does not reflect the true value of the bank, indicating potential undervaluation in the market [1]

Core Viewpoint - Spanish bank Sabadell's board has unanimously recommended shareholders reject BBVA's hostile takeover bid, which is seen as significantly undervaluing Sabadell's business [1][2][3] Group 1: Takeover Bid Details - BBVA launched a €15.3 billion ($17.97 billion) bid for Sabadell, aiming to create the second-largest Spanish bank with domestic assets around €1 trillion [1] - The acceptance period for the bid lasts until October 7, with results expected by October 14 [2] - Sabadell's board indicated that BBVA's offer is undervalued by up to 40% based on traditional valuation methods [3] Group 2: Board's Position and Shareholder Opinions - Sabadell's CEO stated that the board has not set a specific price threshold for reconsideration of the bid [2] - The Chairman of Sabadell mentioned that a "very substantial change" in the offer would be necessary for the board to reconsider its position [3] - David Martinez, the largest shareholder on Sabadell's board, agreed the offer should be rejected but acknowledged the strategic merit of the transaction [4] Group 3: Market Reactions and Offer Dynamics - Analysts expect BBVA to raise its offer as Sabadell's shares have increased beyond the original bid price, although BBVA has stated it does not intend to change its offer [4] - BBVA can legally increase its offer until 10 working days before the end of the acceptance period [5] - The premium offered by BBVA has decreased from 30% to a negative differential of approximately 9.24% compared to Sabadell's April 29, 2024, closing share price [5] Group 4: Regulatory and Strategic Concerns - The Spanish government opposes the merger and has blocked a full merger for at least three years, leading Sabadell to question BBVA's cost-saving targets [6] - Sabadell's board has identified risks related to revenue loss and uncertainties regarding the execution of the proposed merger [6]