BBVA and Sabadell presidents brief shareholders before Basque bank asks shareholders to back takeover bid

hostile takeover launched BBVA To Sabadell Bank continues its course. Tomorrow, July 5, the Basque Bank will hold a promotion extraordinary meeting in which he will propose to his shareholders increase of capital it is necessary to carry out the exchange of shares with Banco Sabadell, which the operation requires. Faced with this new movement, the presidents of both banks Carlos Torres Basque language and Josep Oliufrom Catalonia, wrote letters to their shareholders to inform them of the development of the operation.

The increase in BBVA’s capital consists of the issue new actions which will be delivered to Sabadell shareholders who accept the offer and, according to sources at the Basque bank, “will not involve any payment from BBVA shareholders.”

The final amount of the capital increase will depend on the number of acceptances received from the shareholders of the Catalan bank and, if the proposal is approved, “one of the necessary steps in the framework of the offer to purchase shareholders will be taken.” Banco Sabadell 100% shares.”

To convince BBVA shareholders of the advantages of the operation and get them to subscribe to the capital increase, the president of BBVA: Carlos Torres, sent them a letter asking them to support it, as it was a “positive project for shareholders, employees And society generally”.

As for BBVA shareholders, Torres stresses that the company that emerges from the takeover bid will be clear value formationbecause, on the one hand, they will be part of the bank”stronger and more competitiveand on the other hand, they will achieve increase profitability investments with limited capital impact. He also believes that this is a positive for clients, who will have at their disposal bank of global reachdifferentiated value proposition and superior product offering.

As for society as a whole, the new education “will have more opportunities to provide families and companies and contribute through taxes,” which “will lead to greater economic and social progress. If the capital increase is accepted, BBVA will offer Sabadell shareholders one new share in the Basque bank for every 4.83 shares in the Catalan bank.

The other party to the takeover bid, Banco Sabadell, has sent a letter to its shareholders in which its president, Josep Oliu, informs them of the progress of the takeover bid and that they are still far from the moment when, if possible, they must make a decision.

He reminds them that increasing BBVA’s capital is “necessary” to be able to move forward with the set of necessary regulatory steps so that “BBVA has shares available for offering in exchange for shareholders from Banco Sabadell who wish to do so.”

He emphasizes that under no circumstances will any decisions be made at the extraordinary meeting that would suggest a possible successful takeover bid, nor will any decisions be made by shareholders who could be shareholders of both companies. “This will happen at the moment when acceptance period takeover bids when you have the opportunity to decide,” Oliu said in the letter. He admits he doesn’t know when that will happen, but due to the complexity of the current procedures, he estimates it could beend of 2024 or in 2025.

It is reported that the Bank’s Board will issue a notice at the beginning of the acceptance period. report in which I will appreciate the offer and make its recommendations to shareholders. For this to be possible and for Banco Sabadell shareholders to have “balanced and sufficient” information to make decisions, “BBVA will need to publicly publish clear, transparent and complete “All these are elements that could influence the proposed price, since BBVA’s newly issued shares make up the offer price,” says Oliu.

It also explains the aspects that the Board of Banco Sabadell will analyse on the basis of the report, including: financial consequences set out in detail in the proposal both in the event of a subsequent merger of both enterprises and in the event of its absence, synergy expected in each case, as well as restructuring costs related to them and their impact on capital And business losses is respected, especially in the small and medium business segment.

The Board of Directors will take a closer look at the expected impact on capital as a result of the potential termination of commercial agreements or joint ventures that the Bank has with third parties, as well as the consequences that bond and credit portfolios due to the necessary adjustments to the assessment, on ccompetitive conditions which may be imposed by the National Commission for Markets and Competition depending on the value of the offer, as well as any additional restrictions that may exist by government authorities.

BBVA will hold an extraordinary meeting tomorrow after asking executives to permissions to be able to submit a takeover bid, including a formal request to the European Central Bank (ECB), the National Securities Market Commission (CNMV) and the National Commission for Markets and Competition (CNMC).