BBVA has faced a significant setback in its attempted hostile takeover of Banco Sabadell, failing to secure the required minimum of 30% stake necessary for a controlling position. Carlos Torres, BBVA’s chairman, has seen his endeavor falter just 17 months and 8 days after the public announcement of his takeover offer in May 2024. Despite years of interest in acquiring the entity led by Josep Oliu , neither of his two offers—one in 2020 and another more definitive offer in 2024—were able to gain sufficient traction among the bank’s management or its shareholders. As of now, Torres is not expected to step down from the council.
The latest takeover bid received acceptance from only 25.47% of voting rights (25.33% of shares) , according to a statement released by the National Securities Market Commission (CNMV) on Thursday. This result was drastically below the required minimum, leading to the conclusion that the bid was ineffective. The regulator emphasized that since the necessary voting rights threshold of 30% wasn’t met, the bid is void, as outlined in the offer prospectus and Article 33.3 of the Royal Decree . BBVA even attempted to enhance its share offer during the acceptance period, but shares were trading at a negative premium compared to their market price, resulting in a financial loss for shareholders who exchanged their stocks.
In recognition of the effort, the president of BBVA expressed his gratitude to the shareholders of Banco Sabadell who supported the merger and also thanked their shareholders for their ongoing confidence throughout the acquisition process. However, both banks experienced staff fatigue and morale issues as they grappled with a prolonged, intensive battle across various fronts, including media scrutiny, legal challenges, and the financial complexities associated with the takeover bid.
In a notable turn of events, the regulator announced the outcome of the takeover bid a full day before the expected date, following information received from Iberclear , the entity responsible for managing share custody. This outcome surprised the market, as many anticipated some form of agreement with Sabadell’s leadership. In fact, even those within Sabadell’s management had doubts about remaining completely independent, speculating on a likely acceptance rate below 50% but never anticipating a rejection on this scale, thus isolating Oliu as the sole major advocate for resisting BBVA’s overtures.
The day following the announcement, Carlos Torres, along with BBVA’s CEO Onur Genç , plans to address the media. Questions loom over their earlier statements, which claimed strong backing from institutional investors holding a robust 30% stake. The outcome has been decidedly unexpected, casting doubt on the veracity of those assurances. Despite these setbacks, BBVA states it “looks toward the future with confidence and optimism,” and revealed plans to reactivate its shareholder remuneration scheme, including a €1 billion share buyback program . BBVA will also distribute a €0.32 per share dividend on November 7, which had been delayed in hopes of attracting Sabadell’s shareholders to the takeover offer.
After the news broke, BBVA shares soared by 9% in post-market trading on Wall Street as American Depositary Receipts (ADRs) gained traction. The inefficacy of the bid has been attributed by BBVA to having acted as a major determent to the stock, sparking speculation about whether the mere possibility of a second bid influenced the shareholders’ decisions to reject the offer outright.
Furthermore, the fate of David Martínez , Banco Sabadell’s third largest shareholder, remains uncertain. Martínez had publicly declared his intention to pursue the takeover bid, creating a potential conflict for his position on the board.
The Unfolding 17-Month Saga
Carlos Torres now faces an uphill battle characterized by a drawn-out and publicly fraught process. In recent weeks, as the acquisition’s viability came into question, both banks exchanged accusations over misrepresented support figures and miscalculated potential outcomes of a secondary bid. The initial conversations between Torres and Oliu leaked prematurely to the British media, disrupting the carefully laid plans for the takeover. This lack of discretion forced BBVA to launch its bid without first securing consensus from Sabadell’s management—an essential strategy rule in securing acquisitions.
The timing of the bid was another misstep, coinciding with the Catalan elections, which introduced unwanted political dimensions to what was primarily a financial undertaking. Combining political sentiment with a merger attempt invited scrutiny from the government, leading to an unprecedented degree of interventionism that hindered BBVA’s plans significantly. The ongoing negotiations turned contentious as management leveraged the dividend as a key bargaining tool to retain shareholder support during the tumultuous period leading up to the vote.
Despite the challenges ahead, the market dynamics may offer some reassurance for Sabadell in the future. With interest rates stabilizing around 2% , there exists the possibility for profitability growth in the sector, although the bank’s future plans depend heavily on its ability to optimize its dividend strategy. Now, with the fierce battle lost, Sabadell’s leadership must chart a course for independence, a venture fraught with uncertainty but also potential.