The chairman of Spanish banking giant BBVA, Carlos Torres, has reaffirmed the bank's commitment to its current offer for smaller rival Sabadell, despite growing doubts about the bid's prospects.

Speaking at a university alumni event in Barcelona on Tuesday, Torres insisted that BBVA has "no intention of increasing its offer" for Sabadell. He described the existing proposal, valued at approximately €12 billion, as "very attractive" and expressed confidence that it would ultimately win over Sabadell's shareholders.

The takeover bid, launched in April and turned hostile in May, has faced significant hurdles. While recently receiving approval from the European Central Bank, the proposed merger still requires authorisation from Spain's stock market supervisor and antitrust watchdog CNMC.

Torres downplayed potential competition concerns, stating, "We do not see this operation will have any competition problem." However, the Spanish government has previously voiced opposition to the deal, citing potential negative impacts on the country's financial system, jobs, and customers.

Sabadell's leadership appears unconvinced by BBVA's overtures. On Monday, Sabadell's chief executive officer, Cesar Gonzalez-Bueno, cast doubt on the takeover's chances, remarking at a banking event in Madrid that "the chances of the operation being successful are very slim."

The proposed deal would see BBVA offer one newly-issued share for every 4.83 Sabadell shares. This initially represented a 30 per cent premium over Sabadell's share price on 29 April. However, due to a decline in BBVA's share value since the offer was made, the premium has shrunk to around 2 per cent, valuing Sabadell at approximately €10.27 billion.

When questioned about BBVA's falling share price in contrast to Sabadell's rise, Torres suggested the two were interconnected, noting, "Banco Sabadell's (share price) is very supported by the offer we have put on the table."

Despite the challenges, BBVA remains optimistic. The bank's country manager for Spain, Peio Belausteguigoitia, expressed confidence that the acquisition would proceed as planned.

If successful, the merger would create a banking powerhouse with over €1 trillion in total assets. BBVA has set a minimum approval threshold of 50.01 per cent of Sabadell shares for the deal to move forward.

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