BBVA Maintains Bid for Sabadell Despite Government Conditions

BBVA continues with its decision to maintain the bid for Sabadell after reviewing the condition imposed by the Government last week. The National Securities Market Commission (CNMV) has communicated the bank's decision, which has also received the "unanimous" support of the bank's board of directors, as confirmed by Europa Press.

Last Tuesday, June 24, the Council of Ministers gave its 'green light' to the bid on the condition that both entities (BBVA and Sabadell) maintain their legal identity and separate assets for a period of three years (extendable by two more years), as well as autonomy in management.

"After analysing the agreement, BBVA has decided not to withdraw the offer and, therefore, it remains in force as provided by the applicable regulations," concludes the BBVA statement.

Through a video, the bank's president, Carlos Torres, also announced that the operation continues and defended that, despite the condition imposed by the Council of Ministers, the project creates "enormous value for the shareholders of both entities".

"The union represents a unique opportunity to build one of the most competitive and innovative banks in Europe. Together we will be a stronger entity, with greater scale and the ability to increase financing to families and businesses by 5 billion euros annually, thus boosting the economic growth of our country. In the coming weeks, Banco Sabadell shareholders will be able to join this great project," it stated.

However, in a statement, the bank admits that the condition imposed by the Government "will delay the materialisation of some of the estimated synergies", amounting to approximately 850 million euros according to their calculations.

Furthermore, it reports that it will update and publish all relevant information once it obtains the approval of the prospectus for the public acquisition offer (OPA) by the National Securities Market Commission (CNMV). "This approval is expected to occur in the coming weeks," it adds.

With this latest authorisation, which will be added to the 27 obtained since BBVA announced the operation almost 14 months ago, the start of the acceptance period is approaching, allowing Sabadell shareholders to decide whether to sell their shares to BBVA.

In parallel, Banco Sabadell is considering a possible sale of its British subsidiary TSB. For now, Santander has made a binding offer of 2.3 billion pounds (approximately 2.6 billion euros at the current exchange rate), according to 'Reuters', while it is unknown whether the other interested party, Barclays, has made a binding proposal or not.

According to market sources informed to Europa Press, the board of directors of Sabadell will meet tomorrow to assess the offer, or offers, for TSB. Additionally, it must convene a shareholders' meeting to approve the possible sale.

The BBVA bid imposes a duty of passivity on Sabadell, which means that the board of directors has limited actions to prevent the success of the operation, unless the decisions are approved by the shareholders' meeting, which must be convened 30 days in advance.