Banco Sabadell’s board has unanimously recommended that investors turn down BBVA’s hostile takeover offer, arguing the proposal undervalues the lender and exposes shareholders to unnecessary execution risk.

The recommendation comes in the first week of BBVA’s tender period for Sabadell, which runs until 7 October. In its opinion, Sabadell said BBVA’s bid “significantly undervalued Sabadell’s business.”

Sabadell’s chief executive, César González‑Bueno, called the proposal “riddled with risks and uncertainties,” adding that accepting would mean “exchanging a stable returns profile for risk and volatility” given BBVA’s concentration in Mexico and Turkey.

BBVA’s terms offer one newly issued share plus €0.70 in cash for every 5.5483 Sabadell shares, valuing the target at about €15.3 billion at Thursday’s close. Sabadell’s market value has recently traded above that level, reflecting investor expectations that BBVA may need to sweeten the deal, though the bidder has repeatedly said it will not.

David Martínez Guzmán, the Mexican investor who owns 3.86 per cent of Sabadell and sits on its board, said he agreed the price was inadequate but described the combination as strategically sound. “The transaction presented by BBVA is the right strategy for both institutions, although at a price that currently makes it unfeasible,” he said, noting he abstained from the board’s opinion for other reasons.

Regulatory constraints complicate the path to integration. Spain’s government has said it will block a full merger for at least three years even if BBVA succeeds in the takeover, a stance Sabadell argues undermines BBVA’s synergy assumptions. Sabadell also warned of a potential “risk of loss of revenue or dis‑synergies, together with the lack of certainty about the execution of the proposed merger.”

BBVA chair Carlos Torres has maintained there is “no reason” to raise the bid. The bank, which secured final regulatory clearances for its offer, has said it can begin to realise some synergies prior to any legal merger.

The acceptance window is open until 7 October, with results expected by 14 October, according to Reuters. If acceptance falls between 30 per cent and 50 per cent and certain conditions change, Spanish takeover rules could oblige BBVA to launch a cash alternative at a fair price, potentially requiring a capital increase.

In the background, Sabadell shareholders last month overwhelmingly backed the sale of its British subsidiary TSB to Banco Santander for at least £2.65 billion. The deal, expected to close in early 2026, is widely seen as a move to strengthen Sabadell’s independent position and simplify its business.

Sabadell chairman Josep Oliu told shareholders the sale “was independent of BBVA’s takeover bid and would have happened regardless because of the clear benefits to the bank and its shareholders.” The transaction will allow Sabadell to focus on its Spanish market, where Oliu believes “the bank has a greater growth capacity.” An extraordinary dividend of €2.5 billion will be paid to shareholders who remain with Sabadell and do not accept BBVA’s offer, adding another layer of complexity to the takeover.

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