BBVA studies market to consider takeover bid for Banco Sabadell

Sabadell’s refusal leaves the organization led by Carlos Torres with three options: forget about the operation, improve it with a new offer, or go for a hostile takeover. Nothing has been decided yet regarding the candle building and no immediate official reaction is expected, but according to the same sources they are already turning to their consultants to test the market both on the viability of the takeover bid and on the support they could get if They launch it so that Sabadell shareholders directly decide.

A hostile takeover is an operation that involves direct approach to the shareholders of the target company, even if it does not have the approval of the highest governing body of the takeover; an unsolicited, uncoordinated proposal addressed directly to the market. This entails many risks and there is virtually no precedent in the Spanish and European banking sectors. Therefore, it is treated with the utmost caution.

Attempts have already been made to Sabadell shareholders to gauge their sentiment, financial sources told the newspaper. They explain that such a perspective is absolutely necessary since the Basque bank’s senior management, embodied by Torres, will have to collect at least 15% of the hypothetical support commitments to try to get the operation going first. present it to the entire BBVA board and once there, make a decision.

Apart from receiving preliminary support, analysts’ doubts lie in financial capabilities that BBVA may have

, because the market is taking into account that for this type of acquisition to be successful, they will have to improve the offer with a cash portion. That’s why analysts predict the Basque bank will have to carry out a capital increase if it wants to improve on its initial offer.

Initial offer

The initial offering was entirely in shares. The company of Basque origin proposed a takeover with the exchange of 1 newly issued BBVA share for every 4.83 shares of Banco Sabadell. The offer represented a 30% premium over the close of trading on April 29 (before the news broke); 42% of the weighted average prices of the previous month; or 50% of the weighted average prices for the last three months.

Moreover, President Torres, the day before the Sabadell council met to make a decision, sent a message to his Catalan counterpart: Josep Oliu, to make it clear that they no longer have the opportunity to put forward their proposal. “I think it is very important that your board of directors knows that BBVA does not have the opportunity to improve its economic conditions,” he said.

Given these numbers, Sabadell’s board of directors realized that the bank’s project and its ability to grow were “undervalued.” That’s partly why they said no to BBVA’s proposal and preferred to continue working alone. The Catalan group’s confidence in its own project is absolute, as they stated: “The Board has full confidence in Banco Sabadell’s growth strategy and its financial objectives and believes that the strategy as an independent entity will bring great value.” its shareholders.