Banco Sabadell CEO doubts hostile takeover of BBVA will happen

BBVA hostile takeover 100% shares Sabadell Bank “He shows no signs of leaving,” the director general of the Catalan bank said today, Thursday. Cesar Gonzalez-Buenofor which this is a “very difficult” operation, since the versions of both entities in the data “diverge.”

BBVA is currently implementing the stages of its roadmap for the takeover of the Catalan bank, which began on May 9 with the launch hostile takeover after Sabadell rejected a friendly takeover offer.

Since then, the Basque bank has achieved necessary permissions continue operations, including antimonopoly authorities from countries in which Banco Sabadell is present, such as the USA, France, Portugal, Morocco and the UK, in addition to the approval European Central Bank (ECB).

All you need is permission National Commission for the Securities Market (CNMV), which has already accepted the request for a takeover offer for processing and has approved National Commission for Markets and Competition (CNMC), in addition acceptance of the offer Sabadell shareholders representing the majority of its share capital.

As for the CNMC, Gonzalez-Bueno doubts it will make a decision on operation at stage 1. Regarding the differences in the data offered by both organizations, he cited as an example that BBVA reports that the SMEs on which both banks agree make up 1.5% of the total, while Sabadell estimates them at 40%. : “They do not include those in which only we participate or those in which we both participate with another bank,” he pointed out.

This influenced it BBVA’s offer is not enough after a fall from the beginning of the operation. In his opinion, “if this was not enough before, it is even more so now.” Analysts have calculated Target price for Sabadell shares is 2.25 euros, higher than the Basque bank’s offer. Another reason that Gonzalez-Bueno believes makes the operation difficult is that it hostile takeover What don’t be transparent And? do not have sufficient information.

If the operation continues and ends with the merger of both companies, will affect current and future customers from both banks. The main consequence is that will increase the concentration of banking business with what I know reduces competition and financial services users will have fewer institutions and choices when taking a deposit, applying for a mortgage, applying for a card or investing in an investment fund or pension plan.

“The takeover will give citizens the opportunity lower bank offerbeing sandwiched between three main institutions and thus lacking a competitive offer, which could have a detrimental effect on the Spanish financial system,” they note from Financial Users Association (Asufin).

Also from Organization of Consumers and Users (OCU) von the dark side of a takeover, since it not only reduces competition in the financial sector by increasing bank concentration, but can also cause an increase in fees and an increase in the cost of loans and mortgages.

Reduced competition is also one of the consequences on which the Spanish government bases its refusal of the operation, as the Minister of Economy has repeatedly stated: Carlos Bodiedue to the “potential detrimental impact” it could have on financial stability, customers and the economy.

It said the takeover bid would increase the concentration of banking activities and would mean increase market share from 62% today to 70% According to the Authority, this will lead to the concentration of the three main Spanish banking institutions: CaixaBank, Banco Santander and BBVA, which will harm competition and have “negative consequences” for customers, for financial inclusion, financial stability and the transmission of monetary policy.