BBVA and Sabadell await the result of the takeover bid with doubts about the institutional vote
BBVA’s takeover bid for Banco Sabadell has practically come to an end after 17 months of intense hostile battle between the two entities. This Friday the deadline for shareholders to accept the share exchange ended, which has been extended for five weeks. The period started on September 8, although as is usual in this type of process, applications pile up in the last few hours. The focus is on institutional investors, who are decisive for tilt the balance in favor of Carlos Torressomething that would happen if it obtained more than 50.01% of the voting rights, or against, if it did not reach 30%. On a scale ranging from 30 to 50%, the Basque group could carry out the operation, but it would be forced to launch a second takeover bid.
The large funds control around 30% of the capitalenough for their representation to be decisive when setting the course of this hostile takeover bid. In an interview with ‘La Información Económica’, Torres admitted that up to a total of 18 institutional investors have assured him that they endorse the plan to create the second largest banking group in Spain. “A few days ago I was in London meeting with 18 large funds and I did not find any that were not going to attend. All this leads us to the conviction that we will far exceed 50%,” he stated. These statements clash with those of the CEO of the Vallesana entity, César González-Bueno, who believes that he will be able to achieve “at most a third of the support” given the possibility of a second takeover bid, which must be paid entirely in cash.
In fact, he hopes that some institutions will say no and other funds will come with only half waiting for that second offer. For now, only the position of some relevant shareholders is known. It has emerged from BlackRock that its actively managed funds will participate in the takeover bid with the participation they hold of 0.5%, since although they appear as the main investor with 7.4%, it is an indirect participation, through passive funds, which must minimize their deviation with respect to to the benchmark indices that follow. This factor limits your room for maneuver when the outcome is uncertain.
For its part, Zurich Insurance, its second largest shareholder, already expressed its rejection of the same a few days ago. by defending that it does not represent a proposal “attractive beyond the perspectives of the entity itself.” The Swiss company owns 5% of the shares and is considered a strategic partner by the team led by Josep Oliu, given that it distributes its insurance in Spain through a joint alliance with the bank. BBVA has admitted that it plans to break these alliances once the operation is completed, including this one. According to BBVA estimates, index funds control around 20% of Sabadell’s capital, while institutional funds hold close to 30%.
The other side of the coin is represented by the minority interests, over which BBVA has the control. expectation that participation “will be relevant”, statement made based on the number of ‘blue bank’ clients with ‘opado’ securities who have attended the exchange. 40% of the capital is in the hands of some 200,000 individuals, on whom both banks have focused in search of support, especially the Catalan one, a group that includes historical shareholders linked to the entity by family ties. A large part of the analysis houses give a greater probability to an acceptance scenario of between 30 and 50%, however, the interpretation of its success or failure can give rise to different readings. Obtaining 31% is not the same as obtaining 49%.
The correlation between both entities has registered a positive premium of 3.3% on the last day to carry out the exchange of 1 BBVA title with every 4.8376 of Sabadell, with a market capitalization below 16,000 million. The National Securities Market Commission (CNMV) has overcome the uncertainty by setting October 17 as the day on which it will announce the result. The data usually have a lag, which makes it difficult to know the acceptance volume in real time. The supervisor has thus put order to the war of numbers and dates in the middle of a hectic week in which BBVA and Banco Sabadell have taken advantage of all the opportunities that have been presented to them in order to garner as much support as possible for their cause. After Friday, all that remains is to wait for the scrutiny. ‘Alea iacta est’.
