MADRID, May 9 — Spain’s second-largest bank BBVA announced Thursday a hostile takeover bid for its smaller rival Sabadell, three days after an earlier approach which would create a European banking giant was rejected.

The new bid would be carried out under the same conditions as the merger proposal rejected by Sabadell’s board of directors — an exchange of one new BBVA share for every 4.83 Sabadell shares, BBVA said in a statement sent to the Spanish stock market regulator CNMV.

This offer values Sabadell, Spain’s fourth-largest banking group in terms of capitalisation, at nearly €11.5 billion (US$12.3 billion).

Sabadell on Monday said its board had "carefully considered the proposal” but had concluded that it was "not in the best interest” of the bank and its shareholders.

BBVA then informed Sabadell in a letter that it had "no room” to improve its offer, which it considered generous.

The two banks had initially announced a plan to merge in November 2020 with the aim of better weathering the economic crisis triggered by the Covid-19 pandemic.

But it was scrapped just 10 days later, with Sabadell saying that BBVA’s offer did not reflect the real value of its business.

A merger would have created a banking powerhouse capable of competing with Santander — Spain’s leading bank — as well as with European giants such as HSBC and BNP Paribas.

BBVA, which also has operations in Mexico, Argentina and Turkey, is Spain’s second-largest banking group in terms of capitalisation and has 74.1 million customers.

Sabadell operates in 14 countries and has nearly 20 million customers. — AFP