MADRID, May 1 (Reuters) - Spain's BBVA on Wednesday said it had submitted an indicative proposal to merge with Sabadell, valuing its smaller rival at around 12 billion euros ($12.8 billion)according to Reuters calculations.
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.
The lender said that terms in the proposal had been approved by its board, adding that the bank was in a position to "move forward immediately with the transaction."
Following the proposal, Sabadell said on Wednesday it would be up to its board to assess the offer.
The combination of Spain's second and fourth-largest banks would create a lender with over 1 trillion euros in total assets.
The potential merger follows a period of consolidation in the sector as Spanish banks seek to cut costs and boost scale. Spain now has 10 banks, down from 55 before the start of the 2008 global financial crisis.
On Tuesday, BBVA said it had appointed advisers and told the chair of Sabadell's board of directors of its interest in initiating negotiations over a potential merger.
($1 = 0.9375 euros)
Reporting by Jesús Aguado; additional reporting by Andrés González; Editing by Tommy Reggiori Wilkes and Louise Heavens
Source: Reuters