Tense calm in the market before the end of the process of the public acquisition offer, OPA, of Bbva for Sabadell, initiative launched in May 2024 and the result of which will be known tomorrow, Friday, October 17.
This will put an end to what may be only the first chapter of the largest corporate battle in Spanish banking in the last decade, since Sabadell has defended itself tooth and nail against Bbva’s proposal.
Today the Cnmv receives the final acceptance data for the takeover bid, compiled by the Spanish Stock Exchange from the depository banks of Sabadell shares, and if there are no complications in this count, they will be communicated to the market during tomorrow’s session. There are those who wait for them before the stock market session opens on Friday, and others believe that they will wait until the market closes. BBVA, as agent of the transaction, should also obtain the result from the Stock Exchange today.
The market expects acceptance to be between 30% and 50% of Sabadell’s capital. While few retailers have participated in the operation, proposed as an exchange of shares of the Catalan bank for new Bbva securities (1 share of the offeror for every 4.8367 shares of the oppressed bank), the large international funds (as well as David Martínez, director of Sabadell) can allow the result to be within that range.
Consequences
If this outcome is confirmed, the ball will go to Bbva’s court. Initially, this entity conditions the success of the takeover bid on obtaining more than 50% of Sabadell, something unlikely to be achieved.. If it does not reach that level, but exceeds 30% (below the takeover bid would fail), the bank chaired by Carlos Torres will have to decide whether to eliminate the aforementioned condition and launch a second takeover bid to take control.
It would be a “mandatory takeover bid”, according to the legislation, which must be carried out when someone exceeds 30% of the voting rights of a listed company. In this type of operation, the offeror has to offer consideration in cash and at an equitable price.
The determination of this price can also create controversy. The legislation says that, after a takeover bid with a share exchange like the current one, the amount must be calculated as the average market price of the takeover firm on the day of acquisition of the securities that give rise to the mandatory offer.
The Cnmv must announce tomorrow which day it takes as a reference for that calculation: It could be the day of the takeover announcement, the end of the acceptance period, the day before the results are announced or even when the shares are transferred, next week. Furthermore, there are voices that understand that the equitable price should be higher than that of the current takeover bid, having not achieved control of Sabadell.
In any case, Bbva has said that it will only launch the second takeover bid if the price is the same as in the first offer. With current market prices, the exchange values each Sabadell share at 3.22 euros, a level identical to its current price.
If Bbva buys 40% now, and launches the takeover bid for the other 60% at that price – with the option of payment in cash or shares -, The disbursement would be 9,700 million euros (US$11,319.66 million) if all Sabadell shareholders come and ask for cash consideration. Analysts consider that this effort could damage the capital strength of the group led by Carlos Torres.
According to a Citi survey among investors, 57% believe that Bbva will obtain between 30% and 50% of Sabadell and launch a second takeover bid. 10% think they will stay in that range but will give up another offer. At least 24% consider that it could exceed half of the capital and only 9% that it will remain below 30%.
