ISS proxy recommends BBVA shareholders vote in favor of Sabadell takeover bid

ISS is advising BBVA shareholders to vote on the capital increase needed to launch a hostile takeover bid for Sabadell, although it warns of possible uncertainties in the transaction.

ISS’s “trusted advisor” has recommended that BBVA’s major shareholders vote in favor of the capital increase needed to pursue a hostile public takeover bid for Banco Sabadell. In its report, ISS emphasizes “compelling strategic logic” supporting the unification of both actorswhich would allow BBVA to strengthen its position in the European banking sector, especially in Spain.

The capital increase is estimated at 551 million euros., is necessary for BBVA to announce its takeover bid for Sabadell. This transaction includes a proposed share exchange, where one newly issued BBVA share is equivalent to 4.83 Sabadell shares.

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Despite the positive recommendation, ISS also warned of some “uncertainty” surrounding the operation.. In particular, the lack of support from Sabadell’s board of directors and the regulatory approval process raises doubts about the success of the takeover bid and subsequent integration of Sabadell, as well as the value creation of the resulting company.

For the takeover bid to be successful, BBVA will need to obtain approval from both the European Central Bank (ECB) and the European Central Bank (ECB). is responsible for ensuring the solvency of the resulting enterprise and the stability of the financial system, as well as the National Securities Market Commission (CNMV), which is responsible for ensuring that the information presented in the prospectus complies with current legislation.

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The effectiveness of the takeover bid depends on the participation of at least 50.01% of Sabadell shareholders. approval of the capital increase by BBVA shareholders, as well as approvals from the CNMC and the Prudential Regulation Authority (PRA) of the United Kingdom.

BBVA has important shareholders such as BlackRock and Capital Research, which own 5.917% and 5.027%. bank capital accordingly, according to CNMV reports. In addition, the company’s shareholders also include other institutional investors such as Vanguard, Norges Bank, JP Morgan and Goldman Sachs.

Eventually, ISS recommendation in favor of BBVA capital increase for Sabadell takeover bid reflects the strategic importance of the transaction, although the resulting uncertainties highlight the complexity and challenges the bank faces in the acquisition process.

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