MADRID (Reuters) - The board of Spain's Banco Sabadell on Monday rejected a merger proposal by larger rival BBVA (BME:BBVA) for a 12 billion euro ($12.93 billion) all-share merger, Sabadell said in a statement to the Spanish stock market supervisor.
"The board believes that the proposal significantly undervalues the potential of Banco Sabadell and its standalone growth prospects," it said, calling the offer unsolicited.
"Furthermore, the recent material decline and volatility in the BBVA share price increases the uncertainty around the value of the proposal," it added.
On Wednesday, BBVA said it had offered an exchange ratio of 1 newly issued BBVA share for every 4.83 Sabadell shares, a premium of 30% over April 29 closing prices.
BBVA was not immediately available for a comment