Today, the acceptance period for the takeover bid for Banco Sabadell finally begins. BBVA announced the bid on May 9, 2024, after Sabadell’s board rejected the Basque bank’s friendly offer. In the year and a half since, BBVA has had to secure approval from the Spanish National Markets and Competition Commission (CNMC)—which imposed tough conditions to ensure competition—the Government—which has forbidden the Basque bank from merging for three years, thus preventing it from achieving the announced synergies—the Spanish National Securities Market Commission (CNMV), and all other relevant supervisors, from the European Central Bank to the New York SEC.
The bid, which faced strong opposition from the outset from the Government, the Catalan government (Generalitat), and the political class, is now proceeding against all odds and in striking circumstances. The offer currently represents a loss of more than 8% for Sabadell shareholders who accept the terms proposed by BBVA, which has so far refused to improve them.
BBVA is offering one new share and €0.70 in cash for every 5.5483 Sabadell shares. Based on last Friday’s closing market price, this represents a depreciation of 8.7%.
The bidder aims to acquire more than 50% of the shares but has not ruled out lowering the threshold to 30%. It has maintained the terms of the offer, asserting that if Banco Sabadell is trading today at €3.2—when it was at €1.85 on May 8 of last year—it is precisely due to the existence of the takeover bid.
Despite this—and having secured the commitment of several major shareholders to accept the bid—market consensus suggests that BBVA will have to improve its offer if it wants to gain control of Sabadell. To complicate the operation, Sabadell has taken various measures without, apparently, violating its so-called “duty of passivity” as a target company. These measures range from selling its British subsidiary to Santander for nearly €3 billion (entering the British market was one of the incentives for BBVA, which is also present in Spain, Mexico, and Turkey) to announcing a strong cash dividend for those who do not tender their shares in the bid that begins today.
