Back to BBVA’s takeover bid for Sabadell. Last Thursday, just eight months after Carlos Torres decided to present a hostile offer to buy the country’s fourth entity, BBVA made another technical adjustment to guarantee the success of the operation. A new change in the plans of Torres, who when he launched the takeover bid on May 9 hoped to begin the integration around this time, but who still It does not have the endorsement of either Competition or the CNMV. So much so that in La Vela it is already taken for granted that the merger, if all authorizations are achieved, will not last at least until first quarter of 2026.
The BBVA leadership defends tooth and nail that it will not increase the offer. And he has already made two technical changes to avoid it and make it difficult for Sabadell to defend the assault. The first was to adjust it to the dividend: now it offers one new share for each 5.0196 titles (compared to the 4.83 reported on May 9, when the takeover bid was launched) plus 0.29 euros.
For example, for a Sabadell shareholder with 1,000 shares, the La Vela group would exchange them for 199 shares and pay in cash the remaining peak equivalent to 0.219 shares. In addition, it would pay 57.77 euros in cash corresponding to the dividend. A strategy to try to convince Sabadell’s minority shareholders, who are mostly opposed to the operation due to historical ties with Catalonia.
The last modification was made last Thursday. UnexpectedlyBBVA decided to exclude treasury shares from the minimum threshold of 50.01% on which the acceptance of the offer was conditioned. Justifies it to take control of voting rights. Currently, the Catalan entity has in its hands around 1.45% of its own shares, which would have to be subtracted from the minimum percentage for the takeover bid to be successful.
Risk to synergies
All these changes are coming with the delay of the operation. Within the La Vela group, it was expected that it would be executed quickly to achieve gross synergies of 850 million euros, which, as sources specialized in integrations warn, could be put at risk as the purchase is delayed. Competition is still examining, in what is known as phase 2, in depth the risk to the sector of the third and fourth entities in the country joining together. In its initial calendar, BBVA hoped to close the Competition phase before the end of 2024, looking in the mirror of CaixaBank-Bankiawhose merger was approved in the first phase.
And meanwhile, the CNMV awaits the opinion of the CNMC before giving the green light to the period of acceptance of the offer by the shareholders of the Catalan entity. If both authorizations arrive, a minimum of 30 calendar days is estimated to close the takeover bid, with the possibility of extending up to a maximum of 70 calendar days if BBVA deems it appropriate to guarantee success.
Until the last five days of the acceptance period, BBVA can raise or change the conditions of the offer again.
If it convinces Sabadell shareholders, the La Vela group will still have to have the approval of Moncloa, which has been strongly opposed from the beginning to the balance of forces it maintains in Catalonia. The reform of the Banking Supervision Law, applied in 2014 by the Executive of Mariano Rajoy, reserves to the Economy the power of veto as a supervisory tool over strategic operations.
This prerogative is contemplated in the twelfth additional provision of Law 10/2014, of June 26, on the organization, supervision and solvency of credit institutions, and represents the greatest threat to overturning Torres’ plans.
More than two years
Under the most optimistic scenario of authorizations, the merger, as BBVA internal sources acknowledge, would not be completed at least until the first quarter of 2026. Depending on how long the Competition and Economics exams are, it could even be delayed. until the summer of the next year. That is, more than two years after Torres broke the board of the banking sector with the first hostile takeover in almost 40 years.
With the creation of a group with more than one billion euros in assets, the leadership of the La Vela group defends the enhancement even with the achievement of most of the synergies without full integration. In fact, the door is left open to allow Sabadell to quote for at least a year. Of course, after the blow to the deadlines due to the delay in Competition, BBVA counterattacks and warns that it would have on the table to withdraw the operation if it considers that the “creation of value is compromised”, as it repeats in the latest weeks the management team.
It is foreseeable that there will be more changes and threats around the takeover. At least, until the last five calendar days scheduled for acceptance of the offer, as established by the takeover law. Until that time, BBVA will have two key alternatives: improve the offer or eliminate or reduce the conditions again.
Source: www.vozpopuli.com
