Banco de Sabadell’s Stance on BBVA’s Hostile Takeover Bid: A Complex Scenario
Banco de Sabadell is currently navigating a complicated situation regarding BBVA’s hostile takeover bid (OPA). Recent communications from the entity reveal that an overwhelming “0.0%” of small shareholders are willing to engage in the exchange proposed by BBVA, led by its chairman, Carlos Torres. Sabadell holds a significant position in the market as it serves as a depositary bank for around 80% of the shares owned by retail investors, accounting for more than 40% of the total capital in the bank.
During a recent appearance at the New Economy Forum in Madrid, Sabadell’s CEO, César González-Bueno, expressed skepticism regarding the shareholder’s response to BBVA’s offer, stating emphatically, “At this price no one is going.” These remarks underline the atmosphere of doubt surrounding the viability of the takeover among smaller investors, who are crucial stakeholders in the institution.
Share Distribution and Market Sentiment
Sabadell stands out in the national sector due to its atomized share distribution, with a notable 51% of the capital held by small savers. It’s estimated that 80% of these shareholders are also customers of Sabadell, making their loyalty significant beyond mere financial metrics. González-Bueno noted that the sentiment against BBVA’s bid is deeply rooted in the social fabric of Catalonia, where two out of three small and medium-sized enterprises (SMEs) are clients of Sabadell. He remarked that the opposition is not purely economic but has a social origin, stating, “In Catalonia, it would be an emotional disaster.”
Investor Dividend and Sentiments
Despite the small shareholders’ reluctance, González-Bueno acknowledged that institutional investors are similarly skeptical. He revealed that after extensive discussions with various types of investors, including active funds and long-term liabilities, the general consensus remains the same: “At this price, it has no interest.” Sabadell’s largest shareholder, Blackrock, holds 7.36% of its capital, followed closely by Zurich Insurance and Fintech Europe. Remarkably, even these major stakeholders voiced their opposition to the current OPA, with many highlighting the importance of fair pricing as a critical factor in their decisions.
Request for Clarity from BBVA
Amidst the ongoing uncertainty, González-Bueno has urged BBVA to provide clarity on the next steps concerning the OPA, as its lengthened timeline has led to confusion for shareholders on both sides. He emphasized the necessity for greater protection for private investors and called for a written commitment from BBVA stating that they will not alter their offer. Reflecting on the commentary from Carlos Torres, the CEO contended that “If I’m not going to do it and I say I’m not going to do it, commit not to do so”, referring to BBVA’s potentially conflicting statements regarding future adjustments to their offer.
As per the current regulations, BBVA has until September 23 to revise its bid, with an acceptance window closing on October 7. Establishing a revised offer at least ten days beforehand is a requirement, and market analysts now anticipate either an enhancement of the current offer or a reduction in the minimum acceptance threshold from 50% to 30%. Such a move could trigger a subsequent and mandated cash offer for the entire capital of Banco Sabadell, a scenario the bank believes would be more advantageous for its shareholders, particularly since the equitable price as designated by the National Securities Market Commission (CNMV) is expected to exceed €3.
BBVA’s Proposed Financial Structure
BBVA’s current proposal combines both shares and cash, offering a new issuance of more than €0.70 gross per title in exchange for 5.5438 shares of Banco Sabadell. This mixed composition may complicate investor perceptions in the upcoming decision-making processes.
Social and Political Stance
In a recent statement, Josep Oliu, Sabadell’s president, asserted that he does not view the bank as merely a government-supported entity but rather as one deeply ingrained within the social and business framework of the country. He elucidated that the opposition from both businessmen and customers adds another layer of complexity to BBVA’s proposed merger. The Council of Ministers openly rejected the merger, deciding to inhibit its effective execution for a period of three years, extendable by another two. Oliu highlighted that the Sabadell brand is emblematic of a significant legacy that both right-leaning and left-leaning politicians will find challenging to dismiss amid public disapproval.
As the landscape of this potential merger continues to evolve, the focus now shifts to the responses from BBVA and the strategic choices that lie ahead for both entities in these intricate financial waters. The prevailing sentiment among Sabadell’s stakeholders appears resolute, indicating a robust defense of their interests against what many perceive to be an undervalued takeover offer.