BBVA defeats major proxies ISS and Glass Lewis in battle for Banco Sabadell

Absorption BBVA at Banco Sabadell It enjoys the unanimous support of major voting advisors around the world. ISS and Glass Lewis have shown their approval of the capital increase that the Basque bank will present at an extraordinary meeting to implement its plan to merge with the Catalan entity. The British “proxy” was the last one to decide on a hostile offerwhich would lead to the emergence of the third largest bank in Europe, which, although it notes that it is “A uniquely confusing situation,” advises shareholders to give the go-ahead.

“Despite short-term financial instability, we are inclined to recommend that investors provide the board of directors and flexibility of BBVA’s management team to implement the takeover bid.” they comment on this in the report. Among the reasons from a strategic point of view, they put forward the possibility that BBVA will move its position closer to from the “leading” bank in the Spanish market: Banco Santander. “The indicators suggest, at a minimum, that management and the board of directors expect a significant increase in the short term for current BBVA investors,” they elaborate.

The document also highlights the trend towards higher profit targets resulting from the integration with Banco Sabadell, such as an increase in Earnings per share (EPS) by 3.5% or an increase in book value per share by 1%, among other things. one of many The things that won’t change with this operation are atomization. a shareholding that will still be very fragmented because it will not have a solid core. According to the National Securities Market Commission (CNMV), BBVA’s largest shareholders are BlackRock with 5.9% of capital and Capital Research and Management Company (5%).

On the other hand, BlackRock also appears as a significant shareholder in Sabadell Bank from 6.6%, Sizing Fund Consultants (3.8%), Mexican David Martinez, who controls 3.1% through his investment company Fintech Europe. To a lesser extent they also emphasize Norwegian bank (1.9%), Vanguard (1.3%), Goldman Sachs (1%) or ICE (1%). The minimum consensus among Sabadell’s investor group for the proposal to be accepted is 50.01%.

This double is a big boost to Carlos Torres’s intentions, since his verdict is usually used by funds as a guide for voting at meetings. Except for the largest ones, which usually have their own management team. direct the voting direction orientation, Most institutional investors will be guided by this view, which opens the door for BBVA to have complete discretion to raise capital.

When Institutional Shareholder Services (ISS)largest proxy in the world, defended its recommendation in favor of expansion considerations, which integration is “irresistible” strategic logic for the bank, given that it will help it “continue its consolidation in the European market,” especially in the Spanish banking scene. In the same way, it also warns about the risks faced Banco Sabadell when objecting to the proposal. “Without board support and pending regulatory approvals, there is uncertainty about the success of the proposal and the subsequent integration and creating value for the resulting group“, they point out.

Currently, a takeover bid must pass all relevant regulatory filters. He European Central Bank The (ECB) will be the first to make a decision on the takeover offer, and to do so it has a period of 60 days, to which a further 30 days can be added from the date of its receipt, in this case 4 June. Until the National Securities Market Commission (CNMV) publicly expresses its opinion, it will not be able to make a statement. In parallel, the National Commission for Markets and Competition (CNMC) will is responsible for checking for problems concentration.