(Bloomberg) -- BBVA SA announced its highest-ever interim dividend, as it seeks to win over investors for its plan to acquire a smaller Spanish rival.
Spain’s second-largest lender will pay out a gross €0.29 ($0.32) per share in cash next month, according to a regulatory filing Thursday. While the interim payment is part of its previously-announced dividend plan, the payment is almost a third more than the €0.22 per share expected.
Since April, BBVA has been immersed in a fight to acquire Banco Sabadell SA. The bid is under regulatory and competition review, but is considered hostile by Sabadell and also faces push-back from the government, which is concerned about market concentration but has limited powers to block it.
Banco Sabadell is arguing that it has strong growth prospects as an independent bank and can offer shareholders large returns. Its managers are using its investor return policy as one of their weapons to reject BBVA’s offer. Sabadell announced in July it will pay €2.9 billion ($3.23 billion) to shareholders over this year and next, up from €2.4 billion it promised earlier.
BBVA is seeking to counter the argument in part by also pledging to offer higher returns. Group Chief Executive Officer Onur Genc said on Wednesday at a Bank of America conference that there will be “more dividends, more cash flow to the Sabadell shareholders” if they accept their offer.
BBVA’s official name is Banco Bilbao Vizcaya Argentaria SA.
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