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UPDATE 1-BBVA CEO says in no rush on deal, Sabadell shares slip

(Adds quotes from BBVA CEO, share prices)

MADRID, Nov 18 (Reuters) - Spain’s BBVA struck a cautious tone on a potential merger with smaller rival Sabadell on Wednesday, with its CEO saying the bank would carefully analyse any deal before deciding whether to proceed.

“We are starting the process, we won’t do the deal unless there’s a clear value creation opportunity for our shareholders. We are not forced to do anything,” BBVA’s chief executive Onur Genc said, adding that the merger was far from a done deal.

Sabadell shares were down 4.4% at 1122 GMT after Genc’s comments. BBVA and Sabadell on Monday announced merger talks to create the second-biggest domestic lender by assets, which had lifted Sabadell’s shares by 33%..

BBVA’s announcement of the sale of its U.S. business had also triggered speculation it would use part of the $11.6 billion proceeds to buy its rival.

Genc said the potential acquisition of Sabadell would be in direct competition with BBVA’s intention to potentially undertake a sizeable share buyback programme.

“There are multiple options out there, and a (..) sizeable buyback stands out as a clear one, a clear opportunity to go for, and Sabadell will compete with these options,” Genc said.

Sabadell said on Tuesday it expected a decision on a proposed merger within weeks.

“We are in no rush, we don’t need to rush things. We have to analyse the deal in a proper way, with numbers, clear fundamentals, compare that with other alternatives,” Genc said.

BBVA shares were 0.2% lower on Wednesday, after rising more than 10% over the previous two days. (Reporting by Jesús Aguado and Emma Pinedo; Editing by Isla Binnie, Inti Landauro and Alexander Smith)

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