(Bloomberg) -- Banco Bilbao Vizcaya Argentaria SA’s hostile takeover for Banco de Sabadell SA breaks the law, the smaller rival said, ratcheting up the heat in an increasingly bitter corporate battle. 

Documents provided by BBVA as part of its offer on Thursday “violate” a rule governing how companies must make such approaches, Sabadell said in a filing published on the website of the Spanish securities regulator CNMV. The documents and an investor meeting organized by BBVA “introduce incomplete information that may affect the market,” Sabadell said in the filing late Thursday, without giving more details, though it added it had reported its concerns to CNMV.

The allegations are the next escalation in the spat between Spain’s second-biggest bank and a competitor that has already drawn commentary from the Spanish government. The filing follows BBVA’s decision to make a hostile takeover offer on Thursday — a move that has no precedent among major Spanish banks since the late 1980s — after Sabadell spurned its friendly bid on Monday. 

A spokesperson for BBVA had no comment when contacted by Bloomberg.

BBVA on Thursday made an all-share bid that values Sabadell at about €11.5 billion ($12.4 billion). It’s offering one newly-issued BBVA share for every 4.83 Sabadell shares, equivalent to a premium of about 18% compared to the smaller rival’s closing price on Wednesday.

BBVA’s shares were up 0.54% at 9:03 a.m. in Madrid while Sabadell’s declined 0.40%. Compared to each bank’s closing price before BBVA’s approach on April 30, BBVA is down about 11% and Sabadell is up around 6%.

“We were not expecting the bank to go hostile with conditions that have already been previously rejected by Sabadell’s board and which, in any case, do not look particularly appealing,” Deutsche Bank analyst Alfredo Alonso said in a note. “Moreover, being fixed in the exchange ratio means its success mostly depends on BBVA’s share price performance, which has been significantly hit so far.”

Read More: BBVA Makes $12 Billion Hostile Bid for Sabadell After Snub (3)

A combination of the two lenders would create a new Spanish banking giant with a joint balance sheet of more than €1 trillion. The combined market capitalization of BBVA and Sabadell would be close to €70 billion, taking it near the valuation of Spain’s largest lender, Banco Santander SA.

The Spanish government on Thursday said it opposes the takeover attempt because it could create uncertainty in the financial market. It also said it has the final word on approving any deal. 

The comments came ahead of regional elections in Catalonia on May 12. Sabadell is a Catalan bank and politicians in the region have raised concerns over the planned acquisition. 

The negative reactions to the proposed deal from several government officials “could make regulatory approvals from local authorities more challenging,” Berenberg analyst Michael Christodoulou said in a note on Friday. He also said that “the possibility of a cash sweetener remains” even though BBVA has ruled out an improved offer.

Hostile bids are rare in European banking, which is heavily regulated. A hostile approach by BBVA may meet with concern among regulators, a person familiar with the matter previously told Bloomberg.

(Updates with share movements in sixth paragraph, analyst comment in seventh paragraph.)

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