BBVA reminds us that it can take legal action if the government blocks the takeover bid for Sabadell.

MadridBBVA has the option of appealing to the courts any decision the Spanish government may make regarding the possibility of adding additional conditions to the hostile takeover bid for Banc Sabadell. This was reiterated by the bank's own chairman, Carlos Torres: "This [judicial] avenue, of course, always exists," Torres stated in an interview on Onda Cero this Wednesday morning.

The Spanish government must decide before June 26th whether to require more conditions from BBVA for reasons of public interest. These are the conditions the Basque bank could appeal to the courts against. Specifically, the agreement reached by the Council of Ministers can be appealed to the Administrative Litigation Division of the Supreme Court, as stipulated by law. The rulings of the National Market and Competition Commission (CNMC), on the other hand, could be appealed to the National Court.as has already happened.

The fact that BBVA could challenge Pedro Sánchez's executive's decision in court doesn't mean it won't continue with the operation it launched more than a year ago. In fact, Torres has left the door open to accepting any conditions the government may impose, should it do so, and continuing with the takeover bid process, while simultaneously opening the judicial process.

The executive argued that the commitments established with the CNMC, which unanimously authorized the takeover bid in its second phase, already incorporate issues of general interest and reiterated the need to let Banco Sabadell shareholders have the final say on the takeover bid. "It's important that they be able to speak," Torres reiterated, acknowledging that he was "surprised" by Pedro Sánchez's decision to open a public consultation on the takeover bid. Despite the fact that the consultation responses were secret, Torres asserted that an "overwhelming" majority of those who participated did not see an impact in terms of general interest. BBVA has had access to the results as an interested party. The government is expected to make a statement on the transaction on Tuesday of next week, during the Council of Ministers meeting. In Torres's view, the executive cannot tighten the conditions, but can only accept or soften them.

An "unsuitable" sale

Regarding the offers Banco Sabadell has reportedly received for its British subsidiary TSB, Torres indicated that it is not "the ideal time" to divest itself of this business and reiterated the Valles-based bank's duty of passiveness (not to do anything extraordinary without the permission of the shareholders' meeting that would upset the plans of the bank launching the takeover bid). "TSB is a significant asset," he argued during the interview. The sale of TSB would represent a significant loss for Sabadell in terms of business, with the possibility of a loss of value in the bank, but it also leaves a very different bank for BBVA.

In this regard, Banco Santander has reportedly "approached" the Valles-based bank to explore the purchase of the subsidiary, although no formal offer is on the table, according to Sky News. When questioned by the newspaper ARA, the bank chaired by Ana Botín declined to comment.