Investing.com -- Spain’s government is preparing to set additional conditions for approving BBVA’s €14 billion ($16 billion) hostile takeover bid for Sabadell, according to local newspaper La Vanguardia, which cited unnamed sources.
Shares in BBVA (NYSE: BBVA ) (BME: BBVA ) rose more than 2% in Madrid on the report, while Banco de Sabadell (BME: SABE ) stock was up around 1%.
The new requirements could include preserving Sabadell’s management team and workforce, while also introducing constraints on lending practices and consumer protection policies, the report said.
These measures would go beyond the remedies already imposed by Spain’s antitrust authority, and are said to be justified in the public interest.
Although the government cannot block the deal outright, the added conditions could deter BBVA from moving forward.
BBVA Chairman Carlos Torres said Monday the bank might withdraw the offer if the terms became too onerous or if it were required to sell Sabadell’s U.K. subsidiary, TSB.
He said the bank still intends to proceed with its takeover offer for Sabadell but warned it could walk away under certain circumstances.
“If conditions are imposed on us that we do not consider appropriate, we have the option to withdraw, just as we have the option if there is a sale of a relevant asset that modifies the purpose of the offer,” Torres said.
His comments follow Sabadell’s announcement last week that it had received interest from potential buyers for its British subsidiary TSB. Analysts have suggested that the move may be aimed at complicating BBVA’s takeover attempt.
Torres on Monday urged greater clarity regarding any possible sale of TSB, stressing that “any such move amid BBVA’s proposed takeover would have to comply with Spanish legislation.”
Separately, El Pais reported that the government also plans to impose stricter rules on lending to small businesses and prevent significant job reductions.
The Spanish government has so far opposed the deal amid concerns that the merger could result in widespread layoffs.