Key shareholders in the takeover offer: BBVA and Banco Sabadell own 17% of the capital.

Key shareholders in the takeover offer: BBVA and Banco Sabadell own 17% of the capital.

BBVA and Banco Sabadell, Spain’s third and fourth banks by assets, have much in common: 17% of their capital is in the hands of the same investors. The acceptance of these international funds is key to the continuation of a major banking operation this year, as BBVA makes the hostile takeover bid conditional on receiving the backing of at least 50.01% of Sabadell’s capital. The bank of Basque origin must convince a large number of minority shareholders – they number 200,379 – who own 48% of Sabadell’s securities.

David Martinez, Sabadell’s largest private shareholder. | LEVANTE-EMV

Last Thursday, BBVA President Carlos Torres admitted in a press conference that there were already “investors from Sabadell who contacted us with a proposal similar to the one we presented.” Torres noted that some of these investors are “relevant” and also added that “there is interest” from these shareholders. Apart from the possible regulatory implications of this Torres statement, investors crossing both banks are old friends of the Spanish stock market: BlackRock, Vanguard, Norges Bank, JP Morgan, Crédit Agricole and UBS have passive investment funds that copy the behavior of Ibex 35, and for this they buy stocks based on their weighting in a stock market index.

Up to 71 major shareholders

These funds and managers, divided between both banks, total 71 shareholders who control 27% of BBVA’s capital and 17% of the Alicante-based company. The largest shareholder of the Catalan structure is the world’s largest investment fund BlackRock with 3621% of shares. The American firm also controls 5.917% of BBVA shares and is in turn also the largest shareholder in the bank of Basque origin. Sabadell’s 3.5% stake is owned by Vanguard, the second-largest provider of passive funds, which also appears in BBVA with a 5.2% stake.

The Norwegian pension fund Norges Bank controls 3.1% of both banks, the American automobile GMO controls 0.8% Sabadell and 1.3% BBVA; France’s Crédit Agricole owns 0.8% of Sabadell and 0.4% of the company run by Carlos Torres; the manager of AllianceBernstein appears in the capital of the Catalan company with 0.7% and 0.3% BBVA; The largest US bank JP Morgan owns 0.5% of Sabadell’s capital and 0.7% of BBVA.

The main individual shareholder of Banco Sabadell is the Mexican David Martinez, who owns 3.495% of the shares. The founder of Fintech Advisory is Sabadell’s own director and sits on the boards of four companies in his country, such as industrial conglomerate Alfa, glass company Vitro, cement company Cemex and construction company ICA. In the vote in which the board of directors rejected BBVA’s friendly offer, the investor was unable to participate because he understood that there could be a conflict of interest since BBVA’s Mexican subsidiary, BBVA Bancomer, controls 0.77% of Alpha’s capital.

Movements

The most influential Mexican investor on Wall Street, as the American press characterizes him, entered the capital of Banco Sabadell in 2013. Martinez, unknown at that time in Spain, bought 5% of the Catalan enterprise as part of an increase in the bank’s macro capital. The bank spent $1.382 million to shore itself up during the final blows of the 2008 financial crisis.

Aztec sold 2% of its shares in 2018 at market prices, and in February 2019 again upped its bet on Sabadell: increasing its participation from 3.105% to 3.495% after acquiring 22 million shares for 20 million at a price of 0.88. and 0.94 euros per title. During these eleven years as the main shareholder of the Alicante-based bank, Martínez invested $375 million in various operations, although the highest price paid for Sabadell securities is estimated to be €1.64 per share. The company’s largest individual shareholder owns 200.3 million shares, amounting to €370.5 million at current market prices. To the investment in the stock market, we would have to add dividends collected over 11 years. The bank, led by Oliu, has a dividend payout ratio to earnings of 50% and will pay €0.06 per share for the year.