Following the rise in the stock market, Sabadell’s price is now 21% of the price offered by BBVA.
Stock market, markets and quotes
- Initially, the offer was with a 30% markup, but it was narrowed.
- The Catalan bank gained more than 7% on the stock market in just two days
- BBVA falls by 10%, and its capitalization decreases by 5.6 billion euros
Maria Dominguez
The Sabadell stock market has risen by just over 7% since BBVA sent a statement to the CNMV on Tuesday, April 30 at around 2:10 p.m., acknowledging its interest in “exploring a possible merger with Sabadell.” On the eve of Labor Day, the bank unexpectedly confirmed the information published by the British media SkyNews. On Thursday, May 2, the Catalan bank’s quotes rose by 3.6%, closing at 1.86 euros. Today it has reached 10% growth in some locations. Amid the current recovery, the premium that BBVA initially offered for its shares continues to decline, from an initial 30% it has now been reduced to 21.5%.
According to data that BBVA provided to CNMV, the bank, chaired by Carlos Torres, is offering an exchange ratio of one newly issued BBVA share for every 4.83 Sabadell shares. “This proposed exchange equation will imply a premium of 30% over the closing price of Banco Sabadell and BBVA on April 29,” the company said in its second insider filing to CNMV. Based on these data, BBVA values Sabadell at around 2.26 euros per share.. But as we say, that the 30% premium has already been reduced to 21% in the midst of a stock market rally. BBVA-Sabadell: What will the bank be like as a result of the merger?
Sabadell is now trading near its April 2018 highs, and its capitalization exceeds Today is Thursday, for the first time in 6 years 10,000 million Euro. Its market value has risen by €840 million in the last 48 hours and is the most bullish company in the Ibex 35 index for the year, soaring more than 67%. The story is different for BBVA, which fell 10.2% on the stock market in two days. In terms of market capitalization, BBVA lost more than 5.6 billion since Monday, falling to 57.1 billion. Even after this downturn, the Basque bank is positioned by market value as quarter The largest company listed on the Ibex 35, behind only Inditex, Iberdrola and Santander. Sabadell, with a net worth of just over 10.1 billion, ranks 17th. Year-over-year, BBVA is up nearly 19% in the stock market.
Average, The market consensus recommends buying shares of Sabadell and gives a target price. (should list the price they think it should be listed at) from 1.93 euros, which is almost reached. These days, after hearing this news, 8 analyst firms have revised their recommendations and ratings for Sabadell. Bloomberg’s recommendation reported only one change: Keefe Bruillette upgrades it to buy and raises its price target by 20% to €2.38; This is one of the most bullish Sabadell stocks among the consensus, as this price implies it is trading 26% above and above BBVA’s asking price. They also raise the valuation of Sabadell Kepler Cheuvreux (which already believes it is trading at almost a fair price), HSBC (which increases its fair price by 32%, to €2.05) and Autonomous Research, which raises it by 12%, to 1.94. , practically where it is already indicated. Sabadell is showing reluctance to merge with BBVA in just the shares.
In BBVA’s case, 18 analyst firms revised their recommendations and price target. Consensus advises to maintain and estimates it at 11.35 euros. Only one organization is changing its recommendation: Morningstar, which is downgrading its service after learning of its Sabadell proposal; the rest remains unchanged. Six firms increased their valuation of the bank (an average increase of 15%).