02:00 PM EDT, 05/16/2024 (MT Newswires) -- (Updates to include a response from a BBVA representative in the fifth paragraph.)

Banco Sabadell Chief Executive Cesar Gonzalez-Bueno said Thursday that Banco Bilbao Vizcaya Argentaria ( BBVA ) is underestimating the restructuring costs it would face if it were to acquire Sabadell, Bloomberg News reported.

"No one is achieving synergies lower than three times the cost to generate them," Gonzalez-Bueno said, noting that BBVA expects a factor of less than two, according to the report.

Gonzalez-Bueno added that as the deal would trigger fair-value adjustments and breakup fees with suppliers, on top of the higher restructuring costs, the deal's capital impact would be "significantly bigger" than BBVA's estimate of 30 basis points, the report said.

Sabadell said previously that BBVA's hostile takeover bid "violates a rule governing how companies must make such approaches."

A BBVA representative told MT Newswires that all the figures that BBVA reported, including the estimated before-tax restructuring costs of 1.45 billion euros ($1.58 billion) and the estimated impact on common equity tier 1 capital of minus 30 basis points, "have been calculated with the utmost rigor."

Sabadell did not immediately respond to MT Newswires' request for comment.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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