Banco Sabadell believes that the public acquisition offer (OPA) that BBVA has announced for its capital exposes the bank to “multiple uncertainties,” among them the possible flight of talent and the opportunity cost of paralysis that imposes a duty of passivity.
“It is impossible to predict the length of the regulatory review and CNMV approval process for the OPA. (…) nor the result that, if approved, the OPA may ultimately have,” Sabadell warned in his universal registration document, which is a brochure that he publishes annually.
The bank, led by Cesar Gonzalez-Bueno, therefore believes that there is uncertainty regarding the “possible consequences” that the BBVA takeover bid would have on the strategic agreements the bank has in life and general insurance. asset management and institutional custody, and the costs that may arise on termination by the bank of these agreements.
In announcing the offer, BBVA indicated that it expects to realize synergies of €850 million and costs of 1.450 million euros, which would result in 30 basis points of capital consumption.
Gonzalez-Bueno said last week that Banco Sabadell’s board expects the costs to be much higher. On the one hand, since they consider a cost/synergy multiple of 1.7 times optimistic, while for Sabadell the closest value would be three times, that is, for a synergy of 850 million, the costs would reach 2550 million.
In addition, the CEO of Sabadell recalled that The impact BBVA is calculating does not include breakups due to “joint ventures,” especially those Sabadell has with Amundi. in asset management and with Zurich in bancassurance. “I can’t say that figure because it’s not public, but it’s significant and the council included it as well,” he said last week.
The Sabadell CEO’s view on the matter is in line with several industry analysts, who believe the acquisition’s capital cost estimate of 30 basis points is optimistic.
Another risk that indicated by the bank in its universal registration document is a possible loss of personnel a qualified person to seek new opportunities “in the face of the risk of losing his job if the takeover bid is successful.”
As is typical in such cases, some of the cost synergies are achieved by reducing personnel to avoid duplication. BBVA President Carlos Torres himself admitted at a press conference after the takeover bid was announced on May 9 that there would be layoffs. However, BBVA’s goal is to do this through “non-traumatic measures.”
Finally, Sabadell warned that the takeover bid would also represents uncertainty for the bank due to the “possible loss of business opportunities.” as a consequence of restrictions on the actions of the administrative and management bodies of Banco de Sabadell during the upcoming takeover bid.”