Banco Sabadell’s board has urged investors to turn down BBVA’s improved hostile takeover bid, reiterating that the offer “fundamentally undervalued” the bank even after the sweetener announced last week.

The board recommendation, disclosed on Tuesday, comes as BBVA seeks to secure enough acceptances before the offer period closes on 10 October.

BBVA is offering one BBVA share for every 4.8376 Sabadell shares, valuing the target at around €17 billion at Tuesday’s close, compared with a market value of €16.6 billion, according to Bloomberg. The bid is currently worth about €16.97 billion, Reuters reported.

In its opinion, Sabadell’s board said the proposal “continues to significantly undervalue” the lender. The decision was adopted with all votes except one in favour, Bloomberg reported, with Mexican investor David Martinez — a board member and Sabadell’s largest director‑shareholder via Fintech Europe with a 3.86 per cent stake — declaring he will accept BBVA’s terms. “I have decided to participate in the offer presented by BBVA because I believe that the future consolidation of both institutions in Spain will result in an even more competitive entity,” Martinez said, as part of the board’s filing to shareholders.

Martinez also argued that debate had dwelt excessively on price relative to strategic benefits, stating “this factor is secondary to the strategic benefits of the integration of the entities in the long term”.

Sabadell’s management has pushed back against BBVA’s approach since it was relaunched early last year, following an initial attempt in 2020. The Spanish government has also been critical and has imposed a ban on BBVA integrating Sabadell for several years if the deal proceeds, Bloomberg reported.

Sabadell’s concern extends to shareholder dynamics. In an interview, Sabadell’s co‑founder and chief executive officer, Cesar Gonzalez‑Bueno, said roughly 41 per cent of the register comprises retail investors and another 5 per cent are institutions with commercial ties to the bank, making it “likely that BBVA will stay below 50 per cent of the rival’s shares”.

BBVA argues that combining the two lenders would create a stronger domestic competitor and lift the group closer in scale to Banco Santander. For Sabadell, the recommendation is the latest effort to persuade investors that its standalone prospects — and valuation — are preferable to exchanging into BBVA’s stock.

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