BBVA has just presented a public acquisition offer (takeover bid) for shares in Banc Sabadell at the same price and under the same conditions as the merger offer submitted last week. The decision was adopted at a BBVA board of directors meeting held yesterday and it is a hostile takeover bid.
The offer is formulated as an exchange and in it the bank would exchange 4.83 shares of the Catalan entity for each of its own securities. According to the current evolution of the shares, it is equivalent to valuing Sabadell's share price at 2.12 euros, or the total capital at 12,376 million euros.
The hostile takeover is conditional on reaching a level of acceptance of Sabadell's capital of 50.01%, so it is not exclusionary. With this percentage, BBVA could consolidate 100% of Sabadell's results in its accounts.
BBVA maintains the commitment that there is a double operational headquarters, in Madrid and in Sant Cugat, and that the Sabadell brand is maintained in some territories. It will give the current Sabadell shareholders, as already planned, 16% of BBVA's capital.
His character is hostile when he appears despite the Sabadell board of directors' rejection this Monday of last week's friendly merger proposal.
After Sabadell's refusal, BBVA had defended that its proposal was “attractive.” On Sunday, one day before Sabadell's decision, the president of BBVA, Carlos Torres, had sent a letter to the Catalan bank, Josep Oliu, in which he told him that there was no room to improve conditions.
BBVA has in its favor that Sabadell's capital is very fragmented and there is no hard core of shareholders with representative holdings capable of opposing it.
Sabadell sources do not comment when asked about the offer launched by BBVA. The bank remains in the same position already announced by its board, which said that the offer “significantly undervalues” the entity.
BBVA now assures that the proposal is “exceptionally favorable” and will have “very positive financial impacts thanks to relevant synergies and the complementarity and excellence of both entities.”
It will give rise, he says, to “one of the best European banks”, with a loan share close to 22% in Spain. BBVA will maintain its current shareholder remuneration policy and its commitment to distribute any excess capital above 12%. The operation will force BBVA to increase capital, which will require the approval of its shareholders meeting.
The entire offer is in shares, although since the exchange is not in whole numbers, BBVA will pay the “peaks”, as indicated to the CNMV, in cash.
The forecast is that the takeover bid will be presented in “the first half of the maximum period of one month” established by the rule, that is, in less than fifteen days. However, non-opposition from the ECB is required, and the CNMV will not authorize it until it is obtained.
BBVA already owns a small portion of Sabadell's capital, just 0.18%, corresponding to derivatives to cover client positions.
“We present Banco Sabadell shareholders with an extraordinarily attractive offer to create an entity with greater scale in one of our most important markets,” says the president of BBVA.
“Together we will have a greater positive impact in the territories in which we operate, with an additional credit granting capacity of 5,000 million euros per year in Spain,” he adds.
The resulting economic concentration, tells the CNMV, requires the approval of the CNMC to gauge its effect on competition.
