BBVA has formalized the public takeover bid (takeover bid) with the National Securities Market Commission (CNMV) about Banco Sabadell without any change to the conditions to which the last May 9, i.e. delivering one share of the entity resulting from the merger for every 4.83 shares of Banco Sabadell held. “On the basis of this request for consent, the information and characteristics of the offer as provided for in the previous announcement are confirmed, declaring that no change has taken place with regard to said information”, except in a series of consents that will now have to be granted as, for example, France and Morocco, explains the entity of Basque origin in a relevant fact published on Friday afternoon. From now on, the supervisory authority will have to accept the offer of treatment, for which it has a period of seven days that can be extended (but which may also be longer).
Admission to processing by the CNMV is one of the preliminary steps that the bank requires in order to make the takeover bid. Once approved, the market regulator will study the proposal as such. In parallel with the CNMV investigation, BBVA will apply for the necessary permits from the ECB and the CNMC. According to the document presented on Friday, BBVA will also report the economic concentration resulting from the offer to the French and Moroccan competition authorities. In total, the bank estimates that this process of obtaining all approvals could take approximately six months.
On May 9, BBVA decided to launch a hostile takeover bid for 100% of the shares of Banco Sabadell, after the board of this entity rejected a friendly proposal. Subsequently, BBVA admitted that the unification of both entities would entail job losses, although he tried to reassure all parties involved and ensure that they would not be 'traumatic'. The political and business responses were immediate. The Executive criticized the forms and the target of BBVA, whose hostile takeover could mean greater banking concentration and less offering for customers.
Last week, the Minister of Economy, Carlos Body, assured this he sees no option for the mergerEven though more than half of Banco Sabadell's shareholders have approved the offer. “The reason? “The excessive concentration and the potential harmful consequences that this operation could have.” However, last Thursday in Barcelona, Body made it clear to what extent the government's veto over the BBVA-Sabadell operation could have an influence. Such as the minister explains, the Economy cannot prohibit the takeover bid as such, but it can reject the merger request, through which BBVA would be the owner of Banco Sabadell, but it cannot take over the entity.
If this operation becomes reality, the resulting entity is said to have well over a billion euros in assets, a level currently surpassed in Spain only by Santander. The entity chaired by Ana Botín reaches 1.8 billion assets and the resulting bank, with 1.03 billion, would consolidate itself as the second largest bank in Spain, far from CaixaBank (613,000 million), third on the podium. Which, due to market concentration, is of most concern to the Corps if implemented More than 70% of all credit in Spain is said to be in the hands of three banks.
However, despite the frontal opposition shown by the Spanish government and the board of Banco Sabadell to the hypothetical merger, BBVA has finally launched its offering. Both banks are fighting a battle to convince the banks major shareholders of Sabadell, who, if competition and market authorities allow it, will have the final say on the fate of the operation. And once the operation receives regulatory approval, BBVA will be able to launch the takeover bid, giving Sabadell shareholders a period of 15 to 70 days to attend.
The proposal did not convince the Catalan bank's management as they considered it insufficient, but divisions have emerged within the entity's leadership. Last week, citing sources familiar with the situation, Bloomberg explained that David Martínez, one of the main shareholders of Banco Sabadell with 3.49% of the shares and member of the board of directors, yes, he is in favor of absorption.
BBVA already tried to merge with Banco Sabadell in 2020. Although there are things that have changed significantly since then, such as the market value of both entities, with Banco Sabadell currently worth 10,388 million on the stock market compared to 2,500 million then and BBVA with a capitalization of 58,169 million compared to the 23,300 it scored at the first attempt, someone else didn't do it. The opposition from the Sabadell leadership as they considered the offer insufficient.
Message from Sabadell to her staff
On the other hand, the president and CEO of Banco Sabadell, Josep Oliu and César González-Bueno, returned this Friday to send a message to the staff, in light of BBVA's takeover bid. “It will be a long process that will follow a series of very complex authorizations that will take months. In the meantime, we are going to give everything,” González-Bueno said in a video accessed by Europa Press.
“There is nothing new. I would like to emphasize that this is a hostile takeover bid, that is, it was not agreed upon nor requested by the bank's board,” Oliu said in turn.
As he did after the board of directors rejected the merger proposal announced by BBVA on May 1, Oliu, together with Sabadell CEO César González-Bueno, sent a video to employees reminding the reasons why those who the council that has made decision: “[el consejo] “He is convinced that Banco Sabadell's project alone will generate greater value for its shareholders, customers, employees and society in general.”
In addition, he recalled the bank's intention to pay out 2.4 billion euros over the results of 2024 and 2025, a payment “supported by the business plan.”
“We have informed you in a timely manner throughout the entire process. In fact, I have asked César to tell you with high frequency how the bank is doing,” Oliu said before reiterating his confidence in the work of the bank's staff. “Let me once again express my confidence in your ability and in your commitment to further improve the bank's excellent results in recent years,” he added.
He also recalled that the bank's valuation has increased fivefold since 2020 and that from the beginning of this year until April 29, before BBVA presented its merger proposal, Sabadell's price had increased by 60%.
“There is nothing new. Nothing has been written. We are Banco Sabadell, we are a beautiful future project for our customers and employees. I would like to send a hug and encouragement to all the people who are at the bank to continue with this project, with all the strength this deserves,” he defended.
For his part, González-Bueno has indicated that he has 100% confidence in the Sabadell team to improve “even more” on the wonderful results. “2023 has been the best year in history and the first quarter of 2024 has been spectacular in terms of commercial activity and financial results,” he noted.
“Where possible, we will work with more enthusiasm and service orientation than ever, so that the coming quarters will be even better. It will be a long process that will follow a series of very complex authorizations that will take months. In the meantime, let's give it our all. Our focus must be: deliver, deliver, deliver,” he concludes.
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