Banco de Sabadell (SAB) | News Based Sentiment Analysis

• On September 8, 2025, BBVA launched a €14.8 billion takeover bid for Banco Sabadell, offering a share exchange of 5.5483 shares and €0.13 in cash per share. However, this offer represented a 9% deficit in value compared to earlier valuations since April 2024, signaling a potentially contentious negotiation from the start. BBVA stated it won't increase the offer, despite analysts suggesting a potential increase to maintain synergy targets.
• BBVA CEO Onur Genç highlighted the potential benefits of the acquisition at the Barclays Annual Global Financials Conference on September 10, 2025, stating the integration could increase earnings per share for Sabadell shareholders by 25%, based on projected €900 million in annual synergies. The offer is presented as a 30% premium (42% versus the one-month volume-weighted average price), with an acceptance deadline of October 7.
• Banco Sabadell’s Board unanimously rejected BBVA’s offer on September 12, 2025, arguing it significantly undervalued the bank and its future prospects, projecting independent returns of around 37% between 2025 and 2027. The Board believes accepting the bid would mean forfeiting a €0.50 per share dividend in early 2026.
• Sabadell’s board reiterated its rejection on September 15, 2025, citing risks associated with the offer, including a 22-day illiquidity period and the possibility of BBVA acquiring a 30%-49.9% stake, potentially leading to a second bid. They continue to emphasize their projected returns of approximately 37% of the current share price between 2025 and 2027.
• Despite the ongoing takeover battle, analysts remain cautiously optimistic, with Deutsche Bank resuming coverage on September 16, 2025, with a 'Hold' rating and a price target of €3.30. Simply Wall St updated its predictions on September 8, 2025, increasing the price target by 8.5% to €2.48, though forecasting earnings and revenue declines.
• Analyst consensus, based on 12 analysts as of September 14, 2025, suggests an average 1-year price target of €3.19, which is 5.71% below the current share price of €3.38. The consensus rating is 'Outperform', and Sabadell’s Price-to-Earnings Ratio of 8.9x is considered good value compared to industry averages of 9.7x and peer averages of 10.5x.
• The Spanish National Securities Market Commission (CNMV) authorized BBVA's takeover bid on September 5, 2025, allowing the offer to proceed, though BBVA published an exemption document instead of a formal prospectus.

The Investment Story: September was dominated by BBVA’s hostile takeover attempt of Banco Sabadell, met with a firm and repeated rejection from Sabadell’s board, who strongly believe in their independent value and future prospects. The month highlights a significant valuation disagreement and sets the stage for continued negotiations or a potential stalemate.

What It Means for Investors: Investors are navigating a complex situation with a potential takeover premium versus Sabadell’s confidence in its standalone strategy. The board’s rejection suggests BBVA may need to increase its offer to secure a deal, but also introduces the risk of Sabadell remaining independent, potentially limiting upside. The dividend risk of €0.50 per share if the bid is accepted is also a key consideration.

Looking Ahead: Investors should closely monitor any revised offers from BBVA, shareholder reactions to the board’s recommendation, and Sabadell’s performance against its stated financial targets. The October 7 deadline for shareholder response is critical, and the CNMV’s oversight will be crucial.

The Bottom Line: Banco de Sabadell is actively defending its independence against BBVA’s advances, presenting a high-stakes situation for investors. While a takeover remains possible, Sabadell’s strong financial performance and confident outlook suggest it’s prepared to navigate a path forward on its own, potentially delivering significant returns if successful.