The decision of Competition to extend the period to study the adequacy of the takeover bid launched by BBVA for Sabadell has somewhat cooled the possibility that the operation, at least in the current terms, will materialize. It must be remembered that BBVA requires that 50.01% of the shareholders accept the offer.
However, from the beginning there has been a sort of thermometer to measure over time how cold either hot The market perceives that the operation is taking place, and it is the evolution of the premium that exists between the share prices of one company and another based on its exchange equation. At the moment, The premium is 3.7%, a level that is below the average since its launch, which is 5.15%.
In the second week of October, BBVA announced the modification of the exchange ratio from 4.83 Sabadell shares for each BBVA share to 5.0196 shares, so that it adjusts to the payment of dividends from both companies. However, the Basque bank would keep the 0.29 euros of its October 10 payment to Sabadell shareholders to compensate for the discount of said payment from its share price, which would have deteriorated the premium of the exchange equation.
In any case, the operation will close this year and begin next year with a high level of uncertainty since, in addition to the approval of the CNMC and its possible demands, we must see the level of acceptance of the takeover bid by the shareholders of Sabadell, something that also leaves doubts taking into account that the current premium is low (although the probable fall in Sabadell’s share price and the decline in supply should be taken into account).
In order to convince Sabadell shareholders to exchange their shares for those of BBVA, the entity chaired by Carlos Torres could improve the offer on the table, either through a more beneficial exchange, or through paying a part in effective, something that different analysis houses point out. One of them is Deutsche Bank, which indicates that it could offer up to 2,000 million extra in cash, “which would deteriorate its CET 1 capital ratio by 50 points.”
In their last presentation of results, they presented a capital level of 12.84% of the highest quality, above 12% that they set as an objective and the 9.13% that the European regulator requires. According to the calculations, therefore, of the German bank, a capital ratio of 12.34% would remain.
The analyst consensus estimate suggests that the bank will end the year with the ratio at 12.98%. In a hypothetical scenario, you could use those 98 points of excess capital to improve the offer proposed in 3.7 billion euros. However, from that amount (to which they would surely not want to raise the takeover bid from BBVA so as not to strain its capital position) it would be necessary to subtract the restructuring costs of the new company after the merger, which some analysts estimate could exceed the 1.5 billion.
From Bloomberg Intelligence explain that “BBVA has between 3,000 and 5,000 million in excess capital over its objective [11,5-12%] but it is not clear the effect that the operation with Sabadell will have on its capital position. “Under the current terms, the impact will be manageable and the bank calculates a maximum impact of 44 points depending on the acceptance rate but, if the offer is partially in cash, it could limit its capital position taking into account the context of rate cuts and Trump’s tariffs on Mexico,” they add. “BBVA’s capital ratio is already below the average for the rest of Europe , which is from 15.2%, but well above the regulator’s requirement, which is 9.1%, one of the lowest in the industry.”
Lagging in the stock market
BBVA shares have lagged behind the rest of the sector this year, with an advance of 17%which for Renta 4 analysts “does not reflect the fundamentals of the bank, which is listed at a PER [veces que el beneficio se recoge en el precio de la acción] of 6 times and a price/book value of 0.8 times for 2025 as it continues to be burdened by the takeover process for Sabadell, which is longer than expected. “At this point, our central scenario is that the CNMC opts for set some conditions to the offer, non-structural, that allow BBVA to move forward and not withdraw the offer,” they add. “However, until there is less uncertainty about the takeover bid, the price could continue to be penalized despite being listed at attractive multiples,” they conclude.
Thus, the average target price that the analysis houses give to BBVA shares is 11.46 euros, which leaves an additional journey close to 20%. In the case of Sabadell, this potential is 16% despite having rebounded more than 70% since the beginning of the year. Regarding the recommendation, Sabadell receives a purchase advice and BBVA, however, only a hold advice.
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