Sabadell President criticizes BBVA takeover bid in London: ‘Consolidation does not always create added value for shareholders’ | Economy

Banco Sabadell President Josep Oliu chose London, one of the world’s major financial capitals, to explain in a strong but not aggressive speech, read in English, the reasons why he believes the hostile takeover that BBVA’s announcement about the Catalan entity is causing has taken place “serious doubts about the value it purports to create” and “it will have a particularly negative impact on the SME segment.”

Oliu was the guest of honor at the XIII Gala Dinner held this Monday by the Spanish Chamber of Commerce in the United Kingdom (CCERU), which was attended by more than 350 representatives of the British business, financial and social sectors, as well as Spaniards. as members of the new Labor Party government attending the event for the first time.

“Spain remains the seventh largest investor in the United Kingdom and the country is our second destination for investment,” said CCERU President Eduardo Barracina, who, welcoming Oliu, pointed to his institution’s mission to “help restore trust” in “ an era of conflict and fragmentation.”

Although from the very beginning he had the support of the management of Pedro Sánchez and many Catalan institutions in his rejection of the proposal to buy BBVA, Oliu used such an important platform as London to try to unravel the reasons for this refusal.

Just as banking consolidation is justified and even necessary within the EU, he said, “consolidation is not always good and does not always create added value for shareholders.”

“The loss of a bank’s identity, the fact that a company that successfully creates value and has a management team as motivated as Sabadell’s will be dismantled will have an inevitable impact on its customer base and the future dynamics of your business. – Oliu warned.

Forces against a hostile takeover

Approval of the takeover bid by the National Markets and Competition Commission (CNMC) could be delayed until 2025, and during all these months (five since the offer was announced on May 9), the high dividends distributed by both companies have been reduced. the equation of exchange that was lying on the table. At current prices, BBVA’s offer represents a premium of around 3%, a far cry from the attractive 30% it was quoted on announcement day.

Oliu knows time is on his side in this battle. And it also has allies that are too powerful to go unnoticed by international investors.

“Business associations and chambers of commerce across Spain have openly expressed their opposition to the operation, which they consider negative for both lending and competition in the SME market. The Spanish government has repeatedly opposed the agreement,” Oliu insisted in his speech. “Because of the aversion of both management and clients to this transaction,” he warned, “there is significant execution risk for the buyer. “All of this raises serious doubts about the supposed added value that this operation was supposed to represent, since all these aspects could ultimately negate the possible economic benefits and the apparent value offered,” said President Sabadell.

When politics interfere…

Oliu recalled Sabadell’s decision in 2015 to buy British bank TSB, “an opportunity for greater diversification and future consolidation in the EU.” Until Brexit came. “We all know that politics can introduce risks into the business world that are difficult to foresee,” he recalled in his speech, before congratulating himself on the good direction of the British bank in recent years.

The same surprise can be drawn from the speech Oliu faced with BBVA. “Politics, human feelings, sensitivity, communication, social understanding or sense of identity. These are all incredibly important concepts when it comes to running a business. They cannot be left aside,” explained the Catalan banker. “And based on these premises, my personal vision is that today Sabadell and BBVA are more valuable individually than together,” he concluded.