Exclusive-Sabadell pauses closing of Nexi deal following BBVA bid, sources say

By Jesús Aguado and Andres Gonzalez

MADRID/LONDON (Reuters) - Spain's Sabadell has postponed the completion of the sale of its retailers' payments business to Nexi after becoming the target of a hostile takeover by BBVA, two sources with knowledge of the matter said.

One of the sources said the closing has been postponed, likely for months, without any changes to the agreed deal.

"The plans are expected to continue as soon as the outcome of the takeover bid is clarified," the source said. The two sources were speaking on condition of anonymity because the talks are private.

Spokespeople for Sabadell and Nexi declined to comment. Before BBVA announced its more than 12 billion euro ($13.01 billion) bid, Sabadell said in late April that it was expecting to close the 350 million euro sale of its payment business to Nexi in the second quarter of 2024.

BBVA expects the regulatory process and the tender period to take up to eight months and its takeover deal to be completed by mid-2025.

Sabadell agreed in February last year to sell its payments subsidiary Paycomet to Italian payments group Nexi for potentially up to about 350 million euros ($370 million).

In a first step, Nexi would buy 80% of Paycomet for 280 million euros, with the Spanish lender retaining a 20% stake for at least three years. The agreement also included a 10-year partnership with the Italian payments firm.

In early May, Nexi's CEO Paolo Bertoluzzo said the group was "monitoring the situation" following the takeover offer announced by BBVA, and Nexi's finance chief Bernardo Mingrone said the Italian payments firm was "prepared to manage that outcome" if BBVA's takeover offer went through.

"There are standard market provisions that protect the integrity of that deal," Mingrone said.

When BBVA shares closed at 10.9 euros on April 29 - the day before the bank revealed its Sabadell bid - the hostile bid was worth over 12.28 billion euros.

BBVA wants to issue 1.126 billion new shares to fund the deal. It offered one newly issued share for every 4.83 of Sabadell's , representing a premium of 30% over the target's April 29 closing price of 1.7375 euros.

The company's shares have since fallen to 9.02 euros, cutting the premium to about 7% and valuing Sabadell at around 10.16 billion euros, according to Reuters calculations.

Shares in Europe's banking sector have been hit this week by brutal sell-off in the French markets as political uncertainty unleashed the biggest weekly jump in the premium investors demand to hold French government debt since 2011.

($1 = 0.9194 euros)

(Reporting by Jesús Aguado in Madrid and Andrés González in London; Additional reporting by Elvira Pollina in Milan; Editing by Anousha Sakoui and Jan Harvey)