The Battle for Banco Sabadell: A Game of Strategies Between BBVA and Catalonian Banking Giants
In the high-stakes world of banking, the ongoing saga of BBVA and Banco Sabadell has captured significant attention. The conflict escalated when Josep Oliu , president of Banco Sabadell, issued a statement to his team earlier this year, hinting that the bank’s headquarters might soon return to Catalonia , presuming that Carlos Torres , the president of BBVA, might be left behind. This remark exemplified Oliu’s strategic maneuvers as he consistently outplayed Torres in prior confrontations.
Torres has faced numerous obstacles in his hostile takeover bid for Banco Sabadell, a challenge underscored by Oliu’s prior successes. One notable victory was navigating through the government’s intervention , a situation previously deemed unusual for the financial sector. However, the pivotal moment in this drama was the OPA (public offering) threshold, where BBVA sought to acquire at least 30% of Sabadell’s capital to gain significant control.
Despite analyst predictions earlier this week that BBVA would breach this critical threshold, the results were disappointing. The main question that remains is, why did this happen?
Consultants advising BBVA acknowledged the recent tactics employed by Sabadell as a game-changer. Oliu, along with his savvy CEO César González-Bueno , successfully shaped the narrative to imply that Torres could only garner 30% of the capital before needing a second bid to reach the coveted 50% mark. This perception made it more appealing for Sabadell investors to wait for an all-cash deal rather than exchanging shares in BBVA, yet again tilting the scales in Sabadell’s favor.
BBVA attempted to counteract this narrative, arguing that the notion of a second bid was unsubstantiated for two main reasons. First, they believed they were assured of reaching the 50% mark with backing from key investors, including Sabadell’s largest stakeholder, David Martínez . Second, they contended that a future bid would likely offer no advantage, as it would be at the same price as the original offer, complicating matters for potential sellers.
The significant indicator of BBVA’s failure was its inability to obtain even 26% of the capital initially. This shortfall indicated that it could not convince institutional investors—those adept at discerning valuable opportunities—as analysts had previously assumed. The fallout from this setback was swift, as Torres immediately moved to implement a ‘Plan B’ aimed at enhancing shareholder returns through the largest dividend payout in BBVA’s history, alongside a significant share buyback, aimed at boosting share value.
Torres, hinting that he would not resign, is widely recognized as a strategist with experience, having engaged in past corporate battles, including a well-known tussle between Endesa and Gas Natural two decades ago. His decision to launch the bid during the politically charged Catalan election campaign raised eyebrows, though he justified it, claiming the leakage of information necessitated swift action—a leak he has not directly attributed to Oliu.
When evaluating these strategic moves, Sabadell’s relocation of its headquarters back to Catalonia earlier this year served to solidify alliances with figures like Salvador Illa and Junts , indirectly supporting Pedro Sánchez in defending against BBVA’s takeover attempts.
Oliu’s effective maneuvering has repeatedly kept BBVA off-balance, convincing investors that Torres needed to pay a premium to succeed. Ultimately, BBVA conceded and raised its bid, yet Oliu triumphed with a maneuver that made Torres’s initial bid seemingly pointless.
The intriguing twist in this financial tale is that while one may appear to win, they could simultaneously end up on the losing side regarding value. Analysts have pointed out that BBVA may have overpaid for Sabadell and that the future of the Catalonian bank may be jeopardized post-takeover. Additionally, after divesting its UK subsidiary TSB to Banco Santander for €3 billion, Sabadell finds itself lacking key diversification, further complicating its future prospects.
In contrast, Ana Botín , president of Banco Santander , participated enthusiastically in a debate in the U.S. with Jamie Dimon from JP Morgan . Botín’s positive engagement stems from being an indirect winner in this scenario. As BBVA struggles to catch up to Santander’s size, her bank solidifies its standing in the crucial UK market while also benefitting from Sabadell’s recent sell-offs.
As both BBVA and Sabadell grapple with the outcomes of this protracted OPA, the pressing challenge lies in convincing all stakeholders that this situation is ultimately advantageous for both parties involved.