Analysts say it’s unlikely the proposal will be accepted | Financial markets

BBVA is having difficulty acquiring Sabadell. That’s according to analysts, who believe the proposal will be difficult to beat. Renta 4 says the takeover offer price is not attractive to Banco Sabadell shareholders and therefore recommends not participating in the offer.

In particular, the bank of Basque origin is offering the exact price at which it proposed a friendly merger last week: 1 share of BBVA for every 4.83 shares of Sabadell, representing a premium of 18% relative to the closing price, while this price increases to 30%. compared to the moment when the first news appeared about BBVA’s interest in the Catalan bank. The latter’s board has already considered that it is undervaluing the bank.

Bankinter’s research team confirms that it is unlikely that the takeover bid will go through on these terms, as they believe it offers a “simple share swap”. This means that the transaction will be dilutive, meaning earnings per share will be reduced.

Bankinter estimates the merger will be slightly dilutive in 2024/25 (2024 estimated earnings per share -1.2%; 2025 estimated earnings per share -0.5%), even after fully accepting 850 synergies million euros, which BBVA’s requirements will be satisfied.

“Sabadell’s capital is dispersed among investment funds that have likely reached the same conclusion,” explains the analyst firm.

For its part, analyst firm Oddo explains that this is “an unexpected move on the part of BBVA, which seemed possible but unlikely.” Sabadell’s shareholder structure is very fragmented.”

XTB analysts noted that the transaction was something the market was not expecting and demonstrates BBVA management’s belief in the potential synergies. Experts emphasize that the deterioration in the capital adequacy ratio of the company headed by Carlos Torres is very insignificant and will not affect the attractive remuneration policy for shareholders. As the Government has already indicated, the company believes that the main risk lies in greater market concentration. If the operation is carried out, which raises suspicions in the market, then among the first three enterprises the share will already reach 64%, which may mean a deterioration in the conditions offered to clients and a significant decrease in competition.

The degree of concentration is already one of the main weaknesses of the sector in Spain, and the best proof of this is that the remuneration on deposits in the national market is the lowest in Europe. According to the ECB, average deposit yields in the eurozone reached 3.16%, compared with 2.49% in Spain. “We will have to see whether regulators will agree to this operation,” they emphasize.

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