The takeover bid (OPA – Oferta Pública de Adquisición) by BBVA for Banco Sabadell has failed, having been accepted by only 25.33% of the voting shares (25.47% excluding treasury stock), as reported by the two affected entities to the National Securities Market Commission (CNMV).
Ultimately, and 17 months after its announcement, BBVA failed to reach the 50% acceptance threshold. It also failed to reach the 30% threshold that would have opened the possibility of launching a second, all-cash OPA for the capital it did not control. Consequently, BBVA Chairman Carlos Torres acknowledged, “This is not the result we expected, but we respect it and close this chapter.” Following the announcement of the result, BBVA shares rose by over 7% on Wall Street and are trading more than 5% higher on the Spanish Stock Exchange early this Friday, while Sabadell shares are falling by more than 6%.
According to several analysts, such as Citi and XTB, this total failure was not considered likely. It was also not expected that BBVA would achieve more than 50% acceptance; however, a majority of analysts believed BBVA would end up with between 30% and 50% of Sabadell’s capital, which would have obliged BBVA to launch a second OPA, in cash or with a cash alternative, for the entirety of the non-controlled capital at an equitable price.
In fact, Banco Sabadell’s main executives had suggested on several occasions to their shareholders that they should wait for a second OPA given the possibility of receiving greater compensation for their shares in the Catalan bank. For its part, BBVA urged shareholders to accept the OPA throughout the acceptance period, warning that a second OPA might not materialize.
BBVA Resumes Its Dividend Path
A few minutes after the results were released, BBVA issued a statement announcing that it will “accelerate” its profit distribution plan to its shareholders. Specifically, it announced that it will begin the pending share buyback of close to €1 billion on October 31; that on November 7, it will pay its largest ever interim dividend (€0.32 per share), totaling approximately €1.8 billion; and that as soon as it receives approval from the European Central Bank (ECB), it will launch an additional “significant share buyback.”
