The word hostile is the key. To begin with, it technically describes the takeover bid (takeover bid) that BBVA has presented for Banco Sabadell and that has convulsed the economic and financial world in the first ten days of May. The Catalan entity remained silent at first, then forcefully rejected it, revealed private conversations to raise its voice and, finally, has denounced the offer of the group chaired by Carlos Torres to the National Securities Market Commission (CNMV). It demands that he immediately reveal the shareholders with whom the president of BBVA himself said that he had contacted in the presentation of his takeover bid to analysts and the regulator has admitted that he will study whether the law has been breached. The business disagreement is so historic that a hostile takeover has not occurred in the banking environment for 40 years.
But it is not only a war of numbers. The word hostile In parallel, it explains the unusual political unanimity that has aroused against him. From Podemos to the Popular Party they have questioned the operation. The Minister of Economy, Commerce and Business, Carlos Body, could not have been clearer in the half dozen public interventions that he has been offering since Thursday: they have been the forms. BBVA, the Executive argues, has gone too far.
Body has taken a step forward in the Government, with Moncloa giving it all the leading role to lead the official offensive on a bank merger operation so important that it would generate the second largest entity in assets in the country. Nadia Calviño’s replacement in the Ministry has even risen above the second vice president, Yolanda Díaz. She has imposed her response in tone and forcefulness, after the leader of Sumar had led the harshest reactions of the coalition government against the possible merger, since it was made public on April 30. Still last Tuesday, the Government spokesperson, Pilar Alegría, responded at the Tuesday press conference after the Council of Ministers with the standard response: maximum respect for business decisions. “We have to see how the next steps happen and if the takeover bid is finally carried out, but we, based on these arguments, right now have an opinion of rejection of this takeover bid by BBVA,” Carlos said this Friday. Body after registering the hostile takeover. Nor wait for the terms of the different regulatory bodies or the opinion of the shareholders. From the outset, not to the takeover bid. In the end, “the Government has the last word,” he warned.
Instruments it has. The most important, the law of organization, supervision and solvency of credit institutions, which indicates that “it will be up to the Minister of Economy and Competitiveness to authorize merger, spin-off or global or partial transfer of assets and liabilities in which a bank intervenes. , or any agreement that has economic or legal effects analogous to the previous ones.” There will be reports from the Bank of Spain, the Executive Service of the Commission for the Prevention of Money Laundering and Monetary Offenses, the CNMV and the General Directorate of Insurance and Pension Funds. BBVA must send the Treasury everything requested and, from there, the Government will make one decision or another based on economic policy criteria.
In parallel, the CNMV itself is the main arbiter of the entire process, but the competition authorities of Spain and the United Kingdom (through Sabadell’s TSB subsidiary) will also have a say in the merger, as well as the European Central Bank. A long road of six months at best. Without counting on some fringe ending up in court. Which, taking into account the polarization between BBVA and Sabadell, is by no means ruled out.
ten days of may
In the ten days that have passed between BBVA making public its intention to take over Sabadell and the open war between two of the largest national banks, the signals that the Catalan entity has been emitting have increased in volume at full speed from prudence to the stark confrontation. The story started with a surprising relevant fact at noon on April 30 to put an end to the rumors it had raised. SkyNews in the United Kingdom. BBVA confirmed its interest in a possible merger with Sabadell. Sabadell’s measured response came just 30 minutes later. He was aware. And period.
That apparent civility was blown up the next morning, in the middle of the Labor Festival, when the BBVA made public the letter sent the day before by Carlos Torres Vila, to their counterparts in Sabadell, revealing all the details of the takeover bid and increasing the pressure for Sabadell to accept the proposal. The offer, consisting of an exchange of 4.83 Sabadell shares for each one of BBVA, meant valuing the Catalan bank at 11,000 million euros, 16% of the resulting entity. In addition, it offered three positions on the Board of the entity resulting from the merger, one of them vice president, the same distribution of power that was offered in the failed first merger attempt in 2020. No cash, like the market through of multiple analysts was quick to point out when analyzing the proposal.
Sabadell remained silent for five long days and chose to use the same defense mechanism that BBVA used in its first attack in the previous days: communicating directly to the regulator. Communication was maintained through the official channel. On the 6th, after a long emergency meeting of the Board of Directors, a relevant fact was sent to the CNMV in which it explained that it was declining “an unsolicited, indicative and conditional offer that significantly undervalues the entity’s project and its growth prospects.” So he chose to continue independently.
The next morning, Tuesday, May 7, the president and CEO of Banco Sabadell, Josep Oliu and César González Bueno, justified in a video their rejection of BBVA’s merger offer and their confidence in the project independently. Not a single mention of one of the main reasons that caused the rejection and that was known early on May 8. Sabadell once again used the CNMV as a messenger and it came to light a letter that Torres had personally sent to Oliu on Sunday, May 5. In it, and anticipating the Sabadell council that was expected for Monday, he communicated that “BBVA does not have any room to improve its economic terms.”
The coming to light of this correspondence and Sabadell’s refusal to renegotiate seemed to further spur the group of Basque origin, which, at seven in the morning on Thursday, May 9, presented a hostile takeover bid. A few hours later, the president of BBVA advanced in a meeting with analysts who had already begun the first contacts with Banco Sabadell shareholders. “Some have told us that they value the operation positively,” he stressed. The fire continued to spread. Around ten thirty at night, and after a long day of political statements and statements by the national business community (most of them not entering into greater evaluations beyond respect), The Catalan entity reported BBVA to the CNMV for violating the takeover law and demanded that BBVA make known who are the shareholders who would be willing to accept its offer.
Follow all the information Five days in Facebook, x and Linkedinor in our newsletter Five Day Agenda
Subscribe to continue reading
Read without limits
_
#Banco #Sabadell #Government #declare #total #war #BBVA #takeover #bid