Sabadell sells ‘sustainable’ profitability to persuade shareholder to reject takeover bid

In the context hostile takeover initiated by BBVAresponsible for Sabadell They have created a story in which much of the messaging sent to shareholders and the market is about strengths that contrast with their competitors in the race. This was demonstrated when presenting the results for the first half of the year.

Given the international scale and the multiplicity of companies of the group headed by Carlos Torres, Sabadell can boast that he simple entity“It’s very important for us, given that we’re not big, not to be complex,” explained CEO Cesar Gonzalez-Bueno, warning that with a relatively smaller asset base like the one they have, they would receive worse treatment from investors if their structure were more complex.

Another message aimed at investors to counter the current nature Sabadell faced with a hypothetical integration within BBVA The issue was about the presence of the bank of Catalan origin in only two territories. “We are essentially Spanish, and we have a subsidiary in the UK,” González-Bueno emphasized.

Sabadell operates in only two European and developed countries. In contrast, BBVA derives most of its revenues from Mexico and Turkey. Given this evidence, those responsible for the potential acquisition emphasize that its exposure to this type of “volatile” markets is “negligible.”

Sabadell believes that with the current mix of companies and countries, the company has “sustainable” profitability, which provides “high visibility” to the market on what future benefits will be. The bank does not assess whether the alternative BBVA has proposed to the market will provide a comparable level of security, but hopes that time will answer this question. The CEO referred to a letter from President Josep Oliu, in which he asks shareholders to give it time and not to make any decisions at this time. “There are things that are not clear and that need to be clarified,” he added.

Doubts about the correlation

Responsible for Sabadellwho tried to focus on pure business development and avoided any mention of absorptionBBVAThey acknowledged that in recent weeks there had been some correlation between the stock market performance of the two companies.

According to financial sources, this converging trajectory suggests that the market is not pricing it in as more likely that the transaction will finally take place. The differential (spreading) between Sabadell and BBVA It has been falling in recent weeks and yesterday it closed down 3.6%, the lowest since the takeover bid was announced, with shares hitting their highest in a year after closing at €2,038 per share.

However, Gonzalez-Bueno refused to admit that the link was only due to the potential merger. “We also see a very high correlation with our peers,” he countered.

In particular, the CEO pointed to the stock market performance of two other, mostly domestic banks, Bankinter and Unicaja, which he said had been moving in parallel with Sabadell’s. “The correlation can be seen in different ways,” he added, downplaying the likelihood that the market would back the takeover bid with a majority vote.