Sabadell's strong stock market rise increases pressure on BBVA to improve its offer.

Sabadell's shares ended yesterday with a significant gain compared to BBVA's, rising 5.22%. The surge breaks the correlation that both prices had barely maintained in recent months and increases the pressure on the acquiring bank. While Sabadell's stock price has long hovered around 6% above the implied value of the takeover bid, yesterday the difference reached 10%. This is a sign, according to analysts, that BBVA will have to raise its offer to ensure its success.

Sabadell's rise following the TSB sale agreement brings the bank's capitalization to €15.05 billion and the price of each share to €2.84. It is now equivalent to 4.59 BBVA shares, which also rose on the stock market yesterday, but significantly less, by 1.44%. The proposed exchange consists of one BBVA share for every 5.35 Sabadell shares, plus 0.7 cents. It is now more unfavorable for Sabadell shareholders.

Analysts believe BBVA must go further and warn that Sabadell is losing growth potential.

"If BBVA wants to be successful in the takeover bid and acquire more than 50% of Sabadell, it must improve its offer," says Nuria Álvarez, an analyst at Renta 4. She agrees that the gap is 10%. "If a Sabadell shareholder were to sell to the market now, they would earn this percentage relative to the offer."

Jefferies' interpretation is similar. The sale of TSB "does not alter the rationale for BBVA's acquisition of Sabadell," as the British subsidiary is not a "prime strategic asset." However, "current terms value Sabadell at a discount of around 10%," so "it remains to be seen how competitive BBVA's offer is."

Sabadell appears to have extracted value with the €3.1 billion sale of TSB to Santander, and the market wants to cash in. Although it arrives in early 2026, the planned extraordinary dividend is very high and generates enormous expectations. This is true even though, as Nuria Álvarez comments, this divestment raises "doubts about what Sabadell's future growth will be based on."

A Bankinter report agrees that Sabadell's medium-term profit potential will now be reduced. However, this does not mean that its shareholders "will show less interest in BBVA's takeover bid," now that they are facing a large extraordinary dividend at the beginning of next year.

The Catalan bank's commitment is to distribute €3.8 billion to its shareholders in the coming months, including €2.5 billion from the sale of TSB and another €1.3 billion from its financial results. It will present its new strategic plan on July 24, a week before BBVA reports its half-year results.

Some analysts believe the takeover bid should increase by 27%.

Of the analyses released yesterday regarding the takeover bid for Sabadell, the one that paints the most complicated picture for BBVA is that of Nicolas Marmurek of Square Global. Cited by Bloomberg , his verdict is that BBVA will need to raise its offer by 27% to "reach the sole value" of Sabadell. He even believes that BBVA would be forced to hold a new shareholders' meeting, which would further delay the process.

Bank of America, however, was somewhat more measured yesterday. In a report, its analyst Antonio Reale indicated that the sale of TSB would not conflict with BBVA's strategy, whose interest in acquiring Sabadell is focused on Spain. However, he also believes there is room for improvement in the terms of the takeover bid.

BBVA has insisted that the offer is attractive and will generate value for shareholders. The bank announced this week that it is moving forward with the takeover bid, once the government's new terms are known. It also emphasized that adjustments to the exchange will be made each time Sabadell distributes a dividend, not for announced dividends.

Santander shares also rebound

Typically, when a listed company makes a major acquisition, its shares plummet on the stock market, at least initially. This wasn't the case yesterday with Santander, whose shares rose 2.23% to a market capitalization of €105.91 billion. Analysts believe that TSB isn't cheap for Santander, although they see room for significant synergies. The bank itself estimates that it will be around £400 million. "Clearly, Santander believes it can extract substantial cost synergies," Jefferies states in a report. The savings the Spanish bank is banking on are equivalent to 13% of the resulting entity's costs or 50% of TSB's current costs. Santander's reasoning is actually similar to that defended by BBVA in its takeover bid for Sabadell: the integration of technological platforms offers enormous potential in terms of synergies. Analysts point out that these technological synergies are now much greater than they were several years ago.