Sabadell fears talent flight and business paralysis due to BBVA takeover bid

Banco Sabadell believes that the public share offer that BBVA has announced for its capital exposes the bank to “many uncertainties,” among them the possible flight of talent and the opportunity cost of paralysis caused by the duty of passivity. .

“It is impossible to predict the duration of the regulatory review process and CNMV approval of the takeover proposal (…), as well as the outcome ultimately, if approved, it could lead to a takeover bid,” Sabadell warned in its universal registration document, a brochure the company publishes annually.

Thus, the bank under the leadership Cesar Gonzalez-Bueno believes that there is uncertainty about “possible consequences” what BBVA’s takeover bid has on the strategic agreements that the bank has in life and general insurance, asset management and institutional custody, as well as the costs that may be incurred to the bank as a result of the termination of these agreements.

In announcing the offer, BBVA indicated that it hoped to achieve synergies of €850 million and costs of €1,450 million euros, which would result in a capital consumption of 30 basis points.

Last week, Gonzalez-Bueno said that According to the calculations of the board of Banco Sabadell, the costs will 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 calculates does not include breakups due to “joint ventures.”especially those from Sabadell Amundi in asset management and 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 chief executive’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, Europa Press reported.

Another of the risks that the bank lists in its universal registration document is the possible loss of skilled staff seeking new opportunities, “given the risk of job losses if the acquisition is successful.”

As usual in such cases, some of the cost synergies are achieved through staff reduction to avoid duplicationWith. The President of BBVA himself, Carlos Torres, acknowledged during a press conference following the May 9 takeover announcement that there would be layoffs. Nevertheless, BBVA’s goal is for this to be done through “non-traumatic measures.”

Finally, Sabadell warned that the takeover also poses uncertainty for the bank due to “possible loss of business opportunities as a result of restrictions on the actions of the administrative and management bodies of Banco de Sabadell during the expected takeover bid”.