Spanish bank BBVA.US raises acquisition cost of Sabadell for the second time: CET1 ratio expected to decrease by 51 basis points.

Spanish bank Banco Bilbao Vizcaya Argentaria (BBVA.US) has stated that the acquisition of local competitor Banco Sabadell SA may have a larger impact on its capital than previously expected. This is the second time that BBVA has raised its capital impact estimate since launching an unsolicited takeover bid in May. The second-largest bank in Spain stated in regulatory filings that if all shareholders of Sabadell accept its takeover bid, its Common Equity Tier 1 (CET1) ratio could decrease by 51 basis points. BBVA's initial estimate was 30 basis points, which was later raised to 38 basis points. A spokesperson for BBVA stated that this change primarily reflects adjustments to the takeover bid to account for dividend payments planned by both banks, which would increase the cash portion of the payment. BBVA is currently awaiting regulatory approval to proceed with the takeover bid that has been rejected by Sabadell's management. Sabadell CEO Cesar Gonzalez Bueno previously warned that BBVA underestimated potential integration costs, and the impact of the transaction on capital will be "significantly higher" than the estimate of this larger competitor. BBVA has announced adjustments to its takeover bid to compensate for the dividends expected to be paid by both banks, but shareholder approval is required. If all allocations proceed as planned, the new takeover bid will include exchanging 5.3456 shares of Sabadell stock for 1 share of newly issued BBVA stock and 0.70 euros (0.73 dollars) in cash. The previous bid was exchanging 5.0196 shares of Sabadell stock for 1 share of newly issued BBVA stock and 0.29 euros in cash.