BBVA's chairman said Friday that the bank had "no need" to improve its hostile bid for Sabadell and when repeatedly asked to rule out the option of adding cash said it was not his intention.

In an interview with Reuters, Carlos Torres defended the bank's approach to Sabadell, saying it was an "unrejectable offer" that valued the smaller bank at a 30% premium and made conservative assumptions about the cost savings of a merger.

BBVA shocked Spain and provoked widespread political opposition when it turned hostile in May in its bid to take over Spain's fourth-largest bank. Sabadell's board rejected the initial offer, claiming it undervalued the bank.

Investment bankers and analysts have speculated that BBVA may add a cash component to entice Sabadell shareholders, who will not have a chance to vote on the deal for months, given the complex and lengthy process of a hostile bid in Spain.

Asked repeatedly if he would rule out a cash offer, Torres replied in the interview, "It is not our intention to do so, nor do we need to."

In a message sent to Reuters after the interview with Carlos Torres, a BBVA spokesman said the chairman wanted to clarify that the bank ruled out improving the offer.

Torres said the equity component of the deal was fixed and that he could not afford to add a lot of cash "because cash consumes capital. The reason this operation can be done is because it is equity-financed."

BBVA has called an extraordinary shareholders' meeting for July 5 to approve a share issue to finance the offer, which Torres said he was confident will be successful. The bank will then have to wait to hear from regulators about possible corrective measures.

The Spanish government cannot prevent Sabadell shareholders from swapping their shares for BBVA shares, but it has the power to block a full merger. Politicians have claimed that the deal would harm competition in Spanish banking.

"Our clear scenario is that there will be a merger, because after going through a process like that, it will be unthinkable. Why won't the merger happen?" said Torres.

(Edited by Elisa Martinuzzi, Jason Neely and Jan Harvey; edited in Spanish by Javi West Larrañaga)