BBVA may bid for hostile takeover of Sabadell, which has no hard core

He Sabadell council preparing for the fact that in the coming days respond to a proposal that suggested starting negotiations on a possible merger with BBVA which the next day was transformed into a concrete sentence giving an idea of that this was not an impromptu event and to which the bank of Basque origin demanded a quick response.

The Sabadell council responded coolly, acknowledging receipt of the proposal and indicating that it would study it. What might happen if Sabadell rejects the offer from the very beginning or if possible negotiations do not bear fruit? Will BBVA carry out a hostile takeover, reminiscent of what Banco Bilbao did against Banesto almost 40 years ago and which failed?

The people responsible for Banco Sabadell have in their hands a specific offer that BBVA has made to them: a complete purchase with an equation exchange 1 BBVA share for every 4.83 Sabadell shares and an announcement that There will be no power sharing in the new bank, as the Catalan-born structure will have only three directors out of 15, including the vice-president.but not one executive.

Now it is their turn to analyze it and decide whether to accept it, offer other conditions, or simply reject it because they did not ask for it and consider it unsatisfactory. It is noted that in the financial sector Sabadell’s first response was “professional.”, but without introducing any adjective that might give an idea of ​​where it is originally oriented. Bank consultants, Goldman Sachs and Uria will prepare an initial opinion, which will be discussed by the board of directors before taking a position.

The economic offer, according to internal sources of the entity wishing to purchase, does not fully satisfy, since They understand that the valuation of Sabadell’s share of 2.2 euros is too small to accept the offer.. Distribution of internal power the new bank has the same offer that BBVA made just over three years ago, It may also seem sparse.considering the important change in present circumstances from those in which the two subjects then lived.

Within this framework, it is likely that the Sabadell council will not accept what is proposed and will agree to negotiate if BBVA wishes to do so. but this does not mean that they reach a successful conclusion.

Banco Bilbao opposed Banesto

Then the question will be will BBVA be ready to bid for a hostile takeover of Sabadell, something that is almost never done in the financial sector and whose latest reference is the one launched by the then Banco Bilbao defeated Banesto almost 40 years ago (November 1987) and it was a failure. because the Madrid court vetoed it on the grounds that the offer could not be made by an exchange of shares when they did not formally exist, but had to be approved at a meeting of shareholders.

On this occasionThe resistance was led by industrial companies associated with Banesto.which had cross-shareholdings with the bank, and which prevented it from achieving real success.

Sabadell does not have a strong core of shareholders to counter a possible hostile bid. An important part of the capital is in the hands of investment funds, for which it is really important to try to achieve the greatest return in the short to medium term. BlackRock and similar investment funds each own just over 3% of the bank’s capital. The Mexican acts as an individual investor David Martinez which also does not reach 4% of capital.

Josep Oliu, president of the bank, has a much smaller participation than the previous ones, only a few tenths of a point, but according to informed sources has representation of a significant part of traditional Catalan shareholders which, having lost much influence in the capital as a whole due to the successive expansions and sales that some have carried out, still has some relevance.

Protection

Hostile takeover protection usually coincides with find a “white horse” who will decide to side with the managers and make a counter offer or purchase enough securities to prevent the enemy from triumphing. In the Spanish panorama it seems difficult to find. Possible opponents could be Santander and CaixaBank. KaishaBankwhich, when Sabadell went public, had a 10% stake, which it later sold, It is difficult for him to enter this fight. because if successful, they will be forced to undergo a complex process of adjustment or sale of a large part of the business, imposed by the competition authorities, given the important presence of both enterprises in Catalonia and the Valencian Community.

Santander He wouldn’t have this problem, but you would need to know if he was actually interested in a fight. The fact that a foreign player wanted to enter the national market through this door could happen although there are inconveniences in conducting cross-border operations, and it was they who, in principle, forced BBVA to abandon them and turn their attention to Sabadell.