Spanish bank BBVA has launched a hostile 12.23 billion euro (£10.5 billion) takeover bid for TSB owner Sabadell.
BBVA has said it will take its offer directly to shareholders in its Spanish rival after a proposal on the same terms was rejected by Sabadell’s board earlier this week.
On Monday, the two firms confirmed the approach, the BBVA saying it had “no room” to improve its offer for Sabadell which already values itself more highly than its share price value at the end of April.
However, Sabadell swiftly said it had rejected a potential takeover offer which would create one of the largest banking giants in Europe.
It said it had considered the proposal but that the board found it “significantly undervalues the potential of Banco Sabadell and its standalone growth prospects”.
It also said the recent decline and “volatility” in BBVA’s share price “increases the uncertainty around the value of the proposal”.
On Thursday, BBVA took the rare decision to present the bid directly to shareholders in the hope it can gain sufficient support to push a deal through.
Carlos Torres Vila, chairman of BBVA, said: “We are presenting to Banco Sabadell’s shareholders an extraordinarily attractive offer to create a bank with greater scale in one of our most important markets.
“Together we will have a greater positive impact in the geographies where we operate, with an additional 5 billion euro (£4.3 billion) loan capacity per year in Spain.”
In the UK, Sabadell owns TSB after snapping up the high street lender for around £1.7 billion in 2015.
On Wednesday, TSB revealed plans to close 36 UK branches and cut 250 jobs across the business.