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BBVA obtained a 20% capital increase for AG to accommodate the purchase of Sabadell

BBVA obtained a 20% capital increase for AG to accommodate the purchase of Sabadell

The new shares will be issued with a nominal value of €0.49 per share and will be allocated “exclusively” to Sabadell shareholders who participate in the public takeover offer.

At the general meeting scheduled for July 5, BBVA will propose a capital increase of up to 20% to counter the public takeover bid for Sabadell.

According to Spanish media, BBVA will increase capital by up to 20% through 1.126 billion shares worth 0.49 euros per share.

BBVA has called an extraordinary general meeting of shareholders on July 5, at the Euscaldonna Palace in Bilbao, where it will propose the capital increase needed to exchange shares with Banco Sabadell, as part of a hostile takeover bid.

The nominal maximum capital increase will be €551.9 million and will be implemented with in-kind contributions.

“With this capital increase, we take a step forward in the buyout process for Banco Sabadell shareholders. The union of both entities will generate value for everyone, especially for shareholders, by creating a stronger and more competitive bank,” said Carlos Torres Vila, President of BBVA.

The capital increase and the issuance of new shares will be intended “exclusively” for Sabadell shareholders who participate in the public takeover offer, “through voluntary acceptance during the acceptance period or by virtue of the exercise of the takeover and potential takeover resulting from the offer.” , as specified in the agenda published today by BBVA with the CNMV.

The capital increase will be implemented in whole or in part and in one or several tranches, depending on the outcome of the public takeover offer and, if applicable, the exercise of takeover rights and potential takeover rights resulting from the process, BBVA reveals.

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The new shares will be issued with a nominal value of €0.49 per share.

The cost of the BBVA/Sabadell merger could exceed 2.4 billion euros, reveals Expansión, which cites people close to Banco Sabadell, who claim that the cost of the operation will be up to 65% higher than the value estimated by BBVA.

One of the unknowns surrounding the BBVA/Sabadell merger is the amount of total transaction costs. Carlos Torres, on the day of the hostile takeover bid, guaranteed that these amounts would reach 1.45 billion.