Banco Sabadell is inclined to start negotiations with BBVA

Sabadell Bank inclined to start union negotiations with his rival BBVAwhich would be the first step in a process that could create new Spanish banking giant.

According to information from Bloomberg citing sources familiar with operations, there is a growing belief in Sabadell that proposal that BBVA outlined A letter sent to council on Tuesday said a reasonable starting point for starting negotiations, although the bank has not yet made a formal decision on how to proceed. The bank, which does not deny this information, insists that The council did not meet and did not speak on the issue.

So far, Sabadell has only spoken out Delivery confirmation proposed proposal.

Banco Sabadell will continue to discuss the proposal over the weekend and the board is expected to make a decision. special meeting next week, probably Mondayalthough no specific date has been set.

BBVA acknowledged on Tuesday the relevant fact presented by the CNMV, intention to present a proposal to an organization chaired by Josep Oliuand on the same Wednesday he revealed another relevant fact: a letter sent to the council of Sabadell with details of the proposal.

The proposed agreement offers Sabadell a bonus of thirty% about last Monday’s closing price. Thanks to this exchange, BBVA values ​​the bank at 12.2 billion euros.

If the transaction is completed according to this equation, it will give Sabadell shareholders a stake in 16% in the capital of the joint group.

The economic proposal, according to Sabadell’s internal sources, is not entirely satisfactory, as they understand that the stock’s valuation is 2.2 euros That’s not a lot.

Various sources close to Sabadell’s leadership insist on the condition that payment is made, at least partially, in cashto reach an agreement to sell.

Sabadell and BBVA declined to comment.

In the event that Sabadell’s board of directors decides to enter into negotiations, both companies will place themselves in the hands of their external advisors to close the transaction and ensure that it is the most suitable option for shareholders. Sabadell has advice Goldman Sachsand BBVA goes hand in hand with J.P. Morgan.

Options

On the other hand, if Sabadell rejects BBVA’s proposal, sources familiar with the operation suggest that the bank will be chaired Carlos Torres

could raise hostile takeover.

Near an almost unprecedented alternative in the recent history of the Spanish banking sector. It was BBVA that became the protagonist of one of the few precedents with its attempt to buy Banesto through takeover in 1987.. That time the attempt failed.

absence of a core shareholder in Sabadell (one of the most fragmented ownership organizations of the banking sector in Spain), which could create an organized opposition to BBVA, is one of the factors that makes those responsible for the bank consider a takeover bid as a viable option for finally taking control. Catalan education.

Council and Vice Presidency

In addition to the payment in shares, BBVA offered those responsible for Sabadell three seats on the board of directorsof which one will be for non-executive vice president.

The distribution of internal power in the new bank, the same proposal that BBVA made just over three years ago, also may seem sparseaccording to sources close to Sabadell, given the important change in circumstances compared to those in which the two subjects then found themselves.

BBVA intends to maintain a second operational headquarters in Sabadell.

The parties are likely to face difficult negotiations over both price and future management structure. BBVA’s previous attempt to buy Sabadell failed due to prices.

When these negotiations failed at the end of 2020, Sabadell found itself in a worse situation. The company had problems with its UK subsidiary TSB and its stock market value fell. Since then, the company’s value has skyrocketed.

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