BBVA warns it will “without hesitation” withdraw its takeover bid for Sabadell if CNMC imposes excessive conditions
CEO of BBVA, Onur Genchreiterated this Wednesday that his central scenario is that National Commission for Markets and Competition (CNMC) approve his intention buy Sabadell “in the coming months” with some obligations let them be acceptable for your organization and don’t take away the economic sense to concentration. However, the banker recalled that his bank has the opportunity refuse the operation if conditions are excessive. In fact, he made it even more clear than he was a couple of weeks ago when he first mentioned it publicly: “We have the opportunity to go and we won’t hesitate Moreover, if the potential value creation ceases to exist“.
The leader’s statement is especially relevant because it came the day after CNMC decided on Tuesday to transfer the operation to the so-called second stage of analysisrather than approving it now subject to certain obligations being met, as BBVA has publicly said it has been expecting for months. Therefore, the process will noticeably lengthen over time, followed by uncertainty about the outcome takeovers In particular, this opens the door for Government -those who resist integration can impose obstacles in some cases try to rip it off.
In this sense, Genç argued that the purchase of Sabadell is positive for the shareholders of both banks and for society as a whole, since it will lead to the creation of a more efficient and profitable organization, and therefore with a greater ability to invest and grow: “The business case is undeniable, it is known anyone who knows the underlying figures.” In this regard, he noted that BBVA will continue to “collaborate” with CNMC in the coming “weeks and months” to prepare a list of commitments that its group makes that will address the possible competition issues identified. government agency.
Not justified
The decision to expand the CNMC analysis was already noticed a couple of weeks ago, and Genc himself expected it a few days ago. “We would not agree, this is not justified, but we would continue to work with them”– he assured. In this sense, he recalled that BBVA has at least two windows refuse the operation. First of all, if CNMC imposes some conditions what does the bank think surplus and is unacceptable, regardless of phase. It also has the legal right to withdraw its takeover bid if the competition authority haven’t spoken yet at the time when closing the period during which shareholders from Sabadell who wish to do so may accept this offer. In any case, he denied that these were his “central scripts.”
The CNMC statement could indeed play a key role in success or failure operations. Regardless of the stage of analysis, the forecast requirements that may be set by the CNMC or the government may hinder economically BBVA to move on, or the owners of Sabadell to sell their shares. In addition, the takeover law allows the bank of Basque origin to withdraw from the transaction if, before the end of the period during which Sabadell shareholders can accept the offer, the CNMC has not made a decision or made the concentration subject to compliance with certain requirements.
National Commission for the Securities Market (CNMV) has already hinted that, although he is not obliged to do so, he may wait for CNMC to make a decision on the first stage before approving the takeover prospectus and starting the shareholder acceptance period. There are even more doubts that it will do so now that it has entered the second phase, and even more so after the announcement that its President Rodrigo Buenaventura will not seek the government to extend its mandate, which expires on December 16, for another two years . years, and in January he will become secretary general of the International Organization of Securities Commissions (IOSCO).