(MENAFN- Jordan Times)
MADRID - shareholders in Spanish banking giant BBVA on Friday approved a capital increase needed to pursue its hostile takeover of its smaller rival Sabadell, which is opposed by the government.
At an extraordinary general meeting in the northern port city of Bilbao, 96 per cent of shareholders gave their "overwhelming support to the capital increase needed", a bank statement said, hailing it as "a very important milestone".
The measure will allow the issuing of more than 1.1 billion shares, each worth 0.49 euros, which could raise up to 552 million euros (about $600 million).
The final sum will depend on the number of Sabadell shareholders who agree to accept the offer.
Raising the capital limit was necessary for BBVA to fund its bid, which was made on May 9, in which it is offering to exchange one of its shares for every 4.83 Sabadell shares.
"We are fully confident in the success of this transaction, which represents a clear commitment to Spain and its SMEs," or small and medium-sized companies, Chairman Carlos Torres Vila said in a statement.
"The combination with Banco Sabadell will create a stronger, more profitable bank with greater capacity to support families and businesses in their projects for the future."
"BBVA shareholders will obtain high returns on their investment, with limited capital consumption."
while their Sabadell counterparts "will receive a highly attractive premium and a 16 per cent stake in the bank resulting from the merger", it said.
The takeover bid, the first hostile one in the Spanish banking sector in nearly four decades, would create a banking powerhouse capable of competing with Spain's leading bank Santander.
It would also rival European giants such as HSBC and BNP Paribas.
BBVA initially tried to merge with Sabadell, which is based in the northeastern Catalonia region, in November 2020 but the smaller bank rejected the offer on grounds it didn't reflect the real value of its business.
The takeover has also been rejected by the left-wing government of Socialist Prime Minister Pedro Sanchez on grounds it would destroy jobs and reduce competition in the sector.
Economy Minister Carlos Cuerpo has warned the government would "have the last word when it comes to authorising the operation".
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