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Tweaked offer adds cash payment of 0.29 euros per share

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RBC sees cash component rising, room for 10% improvement

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Caixabank, Citi see new hit of 7-8 bps to BBVA's capital

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Spanish government opposes the tie-up

(Adds no comment from BBVA on brokers' estimates for capital

impact in paragraph 7, current valuation of the deal in 13)

By Jesús Aguado

MADRID, Oct 2 (Reuters) - Spain's BBVA said on

Tuesday it had adjusted its takeover offer for Sabadell

to take into account interim dividend payments from

both lenders to shareholders in order to maintain the economic

terms of the bid.

In April, BBVA launched a more than 12 billion euro ($13.4

billion) bid for all Sabadell's shares, which turned hostile in

May.

The bank had said in May, when it announced the takeover

bid, it would adjust the offer later to reflect dividend

payments and add a cash component.

Following Sabadell's payment on Tuesday of an interim

dividend of 0.08 euros against 2024 results, BBVA is now

offering one newly issued ordinary share for 5.0196 ordinary

shares of Sabadell, it said in a filing.

Since BBVA plans to pay an interim dividend of 0.29 euros

per share to its own shareholders on Oct. 10, the offer will

again be adjusted to one newly issued ordinary share of BBVA and

0.29 euros in cash for every 5.0196 ordinary shares of Banco

Sabadell, it added.

Brokers Caixabank and Citi said the offer's cash component,

around 310 million euros, would have an impact on BBVA's capital

ratio of between 7 to 8 basis points on top of the 30 basis

points initially announced by BBVA.

BBVA did not disclose the capital impact in its statement on

Tuesday and declined to make any comments asked about the

estimates from brokers.

At 1225 GMT, shares in BBVA were down 0.4516%, while

Sabadell shares were up 0.7285%.

RBC Capital Markets said that as a consequence of the

revision, the offer to Sabadell shareholders contained around a

3% fixed cash element, which it expected to increase to 7% by

April 2025 based on consensus expectations for BBVA's 2024

dividend

BBVA expects its competition authority to give its approval

in less than two months. Its offer was met by opposition from

the Spanish government, but was given the green light by the

European Central Bank on Sept. 5.

The Spanish lender had initially offered one newly issued

share for 4.83 Sabadell shares, representing a premium of 30%

over the target's April 29 close.

As BBVA shares have fallen to 9.300 euros as of Tuesday's

closing from 10.90 euros when the offer was first made, the

premium is now around 7%, taking into account BBVA's adjusted

offer.

This would value Sabadell at about 10.2 billion euros,

taking into account the new number of shares BBVA would have to

issue now based on the new exchange ratio, Reuters calculations

show.

RBC said in its note that it still expected BBVA's hostile

takeover for Sabadell to be successful, but added that

management may increase the offer by up to 10% to help bridge

the gap compared to the original offer.

($1 = 0.9030 euros)