Bankinter | BlackRock reaches 6.27% of the capital (as against the 3.92% it held previously) and becomes the main shareholder of the bank.
Analysis:
The increase in BlackRock’s stake comes in the middle of BBVA’s takeover bid for Sabadell, so will BBVA improve the exchange ratio and/or make a cash payment? It is also explained by technical factors. BlackRock is a global manager with a firm commitment to passive management (index replication) and Sabadell (SAB) has just entered the MSCI World benchmark index.
We continue to believe that the probability of success of the takeover bid is low in the terms initially proposed because: (1) BBVA offers a simple share swap of 1 BBVA share x 4.83 SAB shares (no cash payment), which at current prices implies a premium of just 6.8%, (2) Sabadell has an interesting shareholder remuneration policy. It should be recalled that Sabadell plans to remunerate shareholders (dividend and share buyback) with up to €2.4bn in 2024/2025 – equivalent to 23.0% of current market capitalisation – and (3) the outcome of the deal will not be known before the end of the year or Q1 2025 after the approval (or not) of regulators (ECB, Competition…) and/or Sabadell’s shareholders. We believe that during this time, the share price of both entities will move within a sideways range (similar or slightly higher than current levels).
In short, we maintain our Neutral recommendation on both banks. Sabadell has surpassed our target price (€1.70/share) and BBVA (Pr.Obj.: €10.6/share vs. yesterday’s close €9.8/share) has an estimated potential of +8.0%.
