Sabadell CEO Sees Bid for Spanish Banking Powerhouse Deadlocked
(Bloomberg) – General Manager of Banco Sabadell SA, BBVA SA’s purchasing proposal is very low and left little possibility for plans to create a Spanish Banking Power Center.
“It is impossible for this to work at this price,” CEO Cesar Gonzalez-Bueno said in an interview. After rejecting Sabadell’s offer, BBVA said that there were two options: ın Heal or withdraw the offer to a great extent or withdraw it ”.
Since the BBVA submitted its offer in May 2024, the increase in Sabadell’s shares supported Gonzalez-Bubeno’s defense against the unwanted proposal. This stance also has a measure of support from Prime Minister Pedro Sanchez’s government in Madrid.
BBVA offered a new share for Sabadell’s 5,3456 ordinary shares and € 0.70 €. This values Sabadell around € 13.6 billion compared to the market value of € 15.6 billion. Sabadell shares increased by 70%, because BBVA’s interest rate left behind the larger opponent’s 20% earnings in April 2024 and left the stock as a 15% premium to the bid price.
“If he wants to buy Sabadell, we think BBVA should raise the cash component to € 1.00 per share if he wants to buy Sabadell,” KBW analyst Hugo Cruz said. According to Bloomberg calculations, paying 1 euro per share will turn to about € 5.3 billion.
Gonzalez-Bubueno implies the obstacles of a higher proposal that BBVA President Carlos Torres resulted in the potential impact on the stock price of BBVA last year.
In the latest defense movement, Sabadell, the fourth largest bank of Spain with beings, agreed to sell the UK Unit TSB and promised to return to shareholders € 6.3 billion ($ 7.4 billion) for three years.
Tussle has parallels to Italy, where the government resistance tank Unicredit Spa’s unwanted offer for Banco BPM SPA. The European Commission criticized Italy and Spain for being involved in agreements.
Government interventions face the risk of violating the rules of the European Union on the free movement of capital, while Gonzalez-Bubeno pointed out that BBVA did not see any risk if the proposal was successful. Authorized, the proposed transaction in this respect is “neutral”, he said.
The Spanish government told BBVA, the country’s second largest bank, would not be allowed to fully integrate Sabadell for at least three years if the combination continues. Gonzalez-Bueno said that the government’s situation will reduce the promised synergies of the agreement to “zero”.
Gonzalez-Bueno said, “When a process is no longer logical, it is perfect and honorable to change your mind.” “I do not think that Orcell’s prestige was destroyed by the regression of Unicredit,” he added.
As a part of his defense, Sabadell held informal negotiations about a combination with Unicaja Banco SA shareholders. According to the expansion newspaper, a potential merger with Abanca also investigated. Abanca said it wasn’t interested.
Gonzalez-Bubueno said, “I don’t see them in the medium term,” although Sabadell is open to unification with smaller competitors. On the other hand, Sabadell said that he was trying to expand in investment banking, olmak Having a market share that corresponds to us ”.
Officially known as Banco Bilbao Vizcaya Argentaria sa, BBVA keeps offering alive, saying that they will delay some synergies, despite the government’s conditions. BBVA leaders, for now, said they were not thinking of increasing the bank’s Sabadell offer.
Last week, Sabadell announced the payment plan and a more ambitious profitability target with the second quarter earnings predicted by analysts.
The payment commitment includes an extraordinary dividend of € 2.5 billion from the regulatory approval by shareholders at a meeting held on August 6 and the TSB sale waiting to sign.
Gonzalez-Bubueno said, olmayan It is our best weapon to create ordinary capital ”against the BBVA proposal.
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