‘Long, hostile and full of uncertainty’: Alantra believes BBVA takeover bid snubs retailers Sabadell | Financial markets

BBVA office in the center of Seville, in a file photo.PACO PUENTES

BBVA began the long process of taking over Sabadell. The bank of Basque origin will have to sue the shareholders of the Catalan company so that they agree to exchange their shares. But far from being a bed of roses, he also faces a race full of obstacles. In a scathing report on the operation, Alantra notes that BBVA has disdain for Sabadell’s small shareholders, making the takeover bid conditional on reaching an agreement of at least 50.01%. In this sense, he believes it is more aimed at funds and large security holders, since they control about 60% of the bank. “The 50.01% acceptance condition means that BBVA does not actually care whether retail investors sell their shares,” the report said.

Investment bank analysts also doubt whether BBVA can win strong support from its own shareholders. The bank, led by Carlos Torres Vila, has already marked July 5 in red on the calendar, the date when its investors must approve the capital increase needed to issue new shares that will be exchanged for Sabadell shares. Alantra notes that the takeover bid and subsequent merger has left BBVA’s own shareholders cold, with shares down 8.5% on the stock market since the bid was announced, while the banking sector has benefited from the market over the period. “BBVA will have to test the support of its own shareholders and we expect it to implement its proposal, even without a qualified majority at the extraordinary general meeting. The meeting is happening sooner than expected and we understand that you want to provide support ahead of a long hostile takeover filled with uncertainty,” the report explains.

The operation must receive approval from various authorities (the European Central Bank, the National Securities Market Commission and the government, among others), but Alantra believes that the main regulatory hurdle will be the National Markets and Competition Commission’s (CNMC) review. In recent years, banking concentration in Spain has resulted in fewer and larger banks holding high market shares. If the operation is successful, the first three companies will add a stake of more than 70%, so the organization will carefully analyze how the merger will affect banking competition. “Obtaining antitrust approval from CNMC will be a major regulatory hurdle, and BBVA’s board of directors will also have to decide whether to move forward or not based on the claims that may be brought,” the same document states.

In the previous mergers between CaixaBank and Bankia, and between Unicaja and Liberbank, CNMC’s analysis was based on identifying postal codes in which the resulting entity would have a monopoly position in terms of physical presence, since it would be unique in terms of having an office. . And in order for them to be fulfilled, he put forward several demands. Among these demands, he asked entities not to close branches in areas where there is no other office. In addition, the same contractual terms that Bankia and Liberbank clients have already had for a certain period of time will be maintained. Analysts at Alantra believe that in this case the conditions may be tightened and may lead to the sale of part of the business due to “excessive market concentration in some regions.”

CNMC, according to this newspaper, expects the operation to be analyzed in a second phase, which could extend the timeline for receiving the green light to one year, compared with the six months that BBVA had hoped.

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