By Elena Vardon


Banco Bilbao Vizcaya Argentaria's board is launching a formal bid for Banco de Sabadell, which values its peer at around $12.4 billion, despite Sabadell's earlier rejection of an initial proposal on the same terms.

The Spanish lender is offering to a takeover of its smaller peer through an all-share deal offering one new BBVA share for every 4.83 Sabadell shares, it said Thursday. This is the same exchange ratio as initially proposed by BBVA.

It values the target's shares at EUR2.12 each--implying a total value of 11.53 billion euros ($12.39 billion)-- based on the average price of the quarter prior to the announcement. Sabadell shares closed at EUR1.80 on Wednesday.

Earlier this week, Sabadell rejected BBVA's approach saying the proposal put forward substantially undervalued its potential. It also published a message it received from BBVA's chairman underlining that the bidder had no room to improve the terms of the offer.


Write to Elena Vardon at elena.vardon@wsj.com


(END) Dow Jones Newswires

05-09-24 0141ET