Analysts have raised the price BBVA should pay for Sabadell to 33%.
The president of the Basque bank affirms to his staff that the merger "is one of the most important projects in European banking this decade."
BarcelonaIf there is a determining element in BBVA's offer (takeover bid) for Sabadell launched a year ago, this is the price. And analysts and brokerage firms, who have revised the price the Catalan bank should have based on its results, prospects, and shareholder remuneration, place it at up to more than 33% above the offer from the Basque financial institution, up to 3.5 euros per share. This is more than Wednesday's price and nearly 13% more than the offer price. Torres is referring to the letter he sent to his staff. to the opinion of the National Competition Commission (CNMC) of April 30, which set conditions for the possible merger, which BBVA assumed. But it ultimately unanimously endorsed the operation. It is now pending. the public consultation which, in an unprecedented move due to a business merger, was launched by the central government and which will last until this Friday.
Catalan business and economic entities They appealed last Friday to companies, SMEs and self-employed workers to express their opposition to the transaction. The arguments must be based on reasons of general interest, as competition reasons have already been overcome, although many are reporting a worsening of the banking oligopoly if the merger goes ahead.
Prospects for the merger
Aside from Sabadell's attempts to find alternatives, which faces a difficult challenge due to the obligation of passivity in a takeover bid, an essential element is the offer. According to analysts, BBVA will have no choice but to improve if it wants to acquire at least 51% of Sabadell's capital and then face a merger, unless the government, which did not welcome this merger, creates significant obstacles. In fact, BBVA does not rule out having to wait for a merger if they manage to control the majority of Sabadell's capital, according to financial sources.
BBVA has until five days before the end of the takeover bid acceptance period to say whether it will raise the price. And this will happen once the National Securities Market Commission (CNMV) approves the prospectus, which could occur around September. Sources close to the bank affirm that the markets will adjust their prices when they see no improvement.
Currently, the so-called market consensus – which includes estimates from various brokerage firms and analysts – stands at an average of 2.97 euros per share, compared to the previous target of 2.73. The price closed this Wednesday at 2.738 euros.
However, some brokerage firms are giving higher estimates, such as JB Capital, which has raised the price of Sabadell from 3.40 to 3.50 euros, which is what BBVA should reach; Alphavalue, from 3.36 to 3.47; Alantra, from 2.80 to 3.05; or HSBC, from 2.65 to 3 euros. Others are making more moderate estimates, such as RBC, which has lowered its estimate of 2.45 euros to 2.75; Exane, from 2.45 to 2.70; Barclays, from 2.30 to 2.70; and Oddo BHF, from 2.40 to 2.60 euros.
At the close of trading on Wednesday, Sabadell is valued at approximately 14.642 billion euros. BBVA's offer is approximately 400 million euros below Wednesday's market price and approximately 600 million euros below the market consensus.
