Banco Sabadell: A Closer Look at the Stock Market Response to TSB Sale
The recent sale of the British subsidiary TSB for a staggering 3.1 billion euros has had a profound impact on Banco Sabadell. César González-Bueno , the CEO of Sabadell, stated that the nature of the recent hostile takeover bid (OPA) from BBVA has changed in light of this transaction. “If we previously considered the price of the OPA was insufficient , now a little more,” he remarked, signaling positive market sentiment throughout the trading session of the Madrid Stock Exchange.
As a result of this strategic move, Banco Sabadell saw a 5% increase in its stock price, indicating a robust market revaluation. The share price increase has led to a decrease in the premium depicted within the ongoing OPA, shifting it from a negative 6% to an even more negative 10% . “The Sabadell Bank today has risen, and therefore the premium is more negative. It is further than the market value is considered,” González-Bueno elaborated.
This latest move is significant, not just because it reflects market perceptions, but because it highlights the perceived value of the TSB sale . González-Bueno framed this transaction as an “opportunity to generate a significant value for our shareholders,” independent of the ongoing hostile takeover bid by BBVA.
Dividends and Future Prospects
Should the sale be approved at the planned Extraordinary Board meeting on August 6 , it would allow Banco Sabadell to distribute an additional 2.5 billion euros in dividends to its shareholders. However, this distribution is contingent upon shareholders not accepting the BBVA takeover offer. Sabadell’s representatives have emphasized that BBVA must enhance its offer if it hopes to engage current stakeholders effectively.
Interestingly, the BBVA offer cannot account for the extraordinary dividend associated with the TSB sale, as it falls outside the timeline of the OPA. Nonetheless, discussions are underway between BBVA and the CNMV (National Securities Market Commission) to potentially supplement the offer to address the impact of the TSB sale.
The timing of this OPA, intended to be conducted in July—before the peak of business activity—appears to be a deliberate strategy by BBVA. Approximately 48% of Sabadell’s retail shareholders are SMEs , with a reported 80% being bank customers. Given the summer holiday season, the timing raises concerns about shareholder engagement and vote turnout.
Analyzing the Current BBVA Offer
Currently, the BBVA’s offer is structured as a share exchange accompanied by a cash premium of 0.70 euros . This means that Sabadell shareholders who accept BBVA’s offer would receive one new BBVA share for every 5.34 Sabadell shares they hold. Evaluating the market conditions, this equates to an offer of around 13.77 euros . However, the current trading value of Sabadell shares stands at approximately 15.18 euros , indicating a 9.3% loss if shareholders decide to sell their shares to BBVA, excluding the planned dividends.
According to González-Bueno, the evidence of an increased share value due to the sale of TSB remains clear. Despite the hostile OPA from BBVA, he argued that Sabadell has gained value and that the bid remains unfavorable compared to market pricing.
Key Dates in the OPA Process
As the timeline for the BBVA OPA unfolds, several key dates remain on the agenda:
- Sabadell will present its first-half results on July 24 , alongside a new strategic plan.
- BBVA will follow suit with its own results announcement on July 31 .
- Once the regulatory green light is given for the OPA brochure, BBVA has a set period of five business days to open the acceptance phase.
- As the OPA’s conclusion could span 30 to 70 calendar days , crucial decisions remain on the horizon.
- A Board of Shareholders meeting is scheduled for August 6 , focusing on voting regarding the TSB sale and additional dividends.
The CNMV’s role will be pivotal in determining whether Sabadell can proceed with these decisions in a joint manner, as the OPA laws remain somewhat ambiguous on this front. Should BBVA present its revised offer in July, the timeline suggests that the culmination of this bid could be evident by September, requiring a 51% acceptance from Sabadell’s capital—a challenging target given that all shareholders are being directly approached.