By Lars Mucklejohn Banco Sabadell, the Spanish owner of British high street bank TSB, has rejected a €12bn (£10.3bn) all-share merger proposal from its bigger domestic rival Banco Bilbao Vizcaya Argentaria (BBVA). Sabadell, which is Spain’s fourth-biggest lender with a market capitalisation of €10bn (£8.6bn), said last night that BBVA’s “unsolicited, indicative and conditional proposal” undervalued the bank’s potential. “The board believes that the proposal significantly undervalues the potential of Banco Sabadell and its standalone growth prospects,” the lender said in a statement. “The board…