Sabadell's rejection of BBVA's merger offer is digested on the stock market this Tuesday. The bank chaired by Josep Oliu recorded a drop of 3% shortly after opening. In the case of BBVA, the entity chaired by Carlos Torres starts the day with a rebound of 1.4% after the first few bars, according to data from Spanish Stock Exchanges and Markets (BME). BBVA maintained this Monday that the offer was “attractive”, now with investors awaiting its next steps.
The decision of Sabadell's governing body – reported by La Vanguardia – is based on the fact that it believes that its strategy as a solo entity will generate greater value for shareholders and is also “aligned with the interests of customers and employees.” It is the second time in four years that Sabadell rejects an offer from BBVA. “The proposal significantly undervalues Banc Sabadell's project and its growth prospects as an independent entity,” the entity said when announcing its rejection.
The ball is once again in BBVA's court, which can discard the operation, improve the offer or launch a hostile takeover, the latter option being very rare in the Spanish market.
The merger by absorption proposal proposed by BBVA valued Sabadell at almost 11.5 billion euros. If the stock price on Monday of last week is taken as a reference, before BBVA's intentions were known, the premium was 30%. The exchange ratio was one new BBVA share for every 4.83 Sabadell shares. Added to that was the offer of three positions on the board of directors and a vice presidency.
Businessmen and the Generalitat had been against the merger due to fear of the concentration that would occur in the sector, the impact on employment or the loss of banking power in the Catalan business fabric.
