Sabadell’s categorical rejection of BBVA’s merger proposal does not deviate too much from the planned script. Although there was no shortage of those in the sector who hoped that the bank chaired by Josep Oliu would leave some room in its communication to the market to reconsider the operation if its conditions changed, the truth is that the Sabadell banker, hardened in a thousand battles, I wasn’t going to make things so easy for Carlos Torres. It is now the former Mckinsey who must act and demonstrate that he really wants to buy the fourth largest entity in the country. He shouldn’t wait too long to make a move.
Sources close to Sabadell explain the decision-making process naturally. The proposal, “unsolicited, indicative and conditional”, as the bank emphasizes in the relevant fact sent to the National Securities Market Commission (CNMV), “significantly undervalues the project” of the entity. That is to say, an offer based on an exchange of shares, with a premium that the market has practically already absorbed and without a prior consensus on it, does not enter into the company’s plans. He wants more. And that more would involve an approach that, at least, involved a part of the proposal in cash and with a much stronger premium. This is a more than reasonable position in the case of an entity that, in the three and a half years since BBVA’s last attempt to take over it, has gone from being a weak player to whom the entire sector pointed out as a victim. from an absorption to a possible buyer. All thanks to management, that of César González-Bueno, who has not only created value for the shareholder, but has put on the table a credible growth strategy for the market.
With his resounding no, the ball rolls to Torres’ roof. Although it is normal that, until now, the bank and its advisors have rejected any possibility of improving the offer, it would be naive to think that this need was not on the table when the process began. It would have a previous option, however, almost utopian, which would be to respond to Sabadell’s sit-in with a takeover bid, hostile of course. It would require enormous courage. We must go back to 1988, when José Ángel Asiaín, at the head of Banco Bilbao, dynamited the sector with a non-negotiated takeover of the Spanish Credit Bank (Banesto), to find a movement of that nature in the banking sector. It was quite a coup against the Spanish financial aristocracy. Today, no one contemplates a boast or a fire of that magnitude.
Yes, it would be more feasible to think about the aforementioned improvement in the offer. In the same way that Sabadell yesterday unequivocally rejected the approach that was on the table, after analyzing it in a “diligent and rigorous” way, according to sources familiar with the deliberation, the highest representative body of the entity would have to follow the same path if the merger proposal were modified in any aspect. Of course, a new roadmap would open other questions. For example, and depending on the amount raised in cash, the movement could force BBVA to undertake a capital increase to cover it, which could even require the approval of shareholders at the meeting.
Of course, doing nothing would leave Torres in an extremely uncomfortable position. It’s hard to think that this would happen at this point, without further ado, because I will not contend, after tripping twice on the same stone. Plus, the transaction makes sense for the bank. She had it three years ago and still has it. BBVA, which receives a very significant percentage of its profit from Mexico and has an enormous level of exposure to a risk economy like Turkey due to its commitment to Garanti, would radically diffuse these dangers. It would also open a window of opportunity to solve its governance problems, currently far from the demands of the European Central Bank (ECB), in favor of a division of powers between a non-executive president (chairman, in Anglo-Saxon terms) and a CEO. Today Carlos Torres holds executive powers.
The times play. Oliu delays the deadlines in a game in which, for now, it is difficult for him to see political edges. However, they exist. Sabadell, today without a hard core of shareholders, had in its ranks illustrious names of the Catalan bourgeoisie such as the Lara, Andic or Folch-Ruiseñol. Oliu is the last of the Mohicans of that stage, whose end does not detract from the distinctive character of an entity with undeniable territorial roots. It would be little surprise if forces like Junts mobilized to avoid an absorption by BBVA. In the midst of the electoral campaign, the issue has not been a issue. Now, today’s political map is not that of next Monday. For better or worse. Without the support of other times, the calendar is an ally for Oliu; The pressure is on Torres.
Follow all the information Five days in Facebook, x and Linkedinor in our newsletter Five Day Agenda
Newsletters
Sign up to receive exclusive economic information and the financial news most relevant to you
To continue reading this Cinco Días article you need a Premium subscription to EL PAÍS
_
#Oliu #forces #Torres #give #courage #offer #cash #hostile #takeover #withdrawal