BBVA's takeover bid for Sabadell: the longer the wait, the more money

BarcelonaA hostile takeover bid, such as BBVA's takeover of Banco Sabadell, wastes effort and resources. That's why an agreement is often sought in a sector as highly regulated as banking. The precedent was The failed attempt by the former Banco de Bilbao to take over Banesto (now part of Santander) almost 38 years ago. The fact is that the largest integration of this century was agreed upon: the absorption of Bankia, with the State as a shareholder, into CaixaBank.

A takeover bid like BBVA's is like a battle. The parties involved dedicate significant amounts of their own and contracted resources, amounting to tens or hundreds of millions of euros, which are usually not explained. The operation itself is a business for advisors, law firms, investment banks, and consulting firms. One, BBVA, focuses its energy on attracting the largest number of Sabadell shareholders; and the other, the Catalan bank, concentrates on preventing leaks.

The Vallesano bank's great counteroffensive, in addition from the return to Sabadell from the headquarters in Alicante, where he left in 2017, was agreed the sale of its British subsidiary, TSB, at Banco Santander in the midst of a takeover bid. He also announced an extraordinary dividend of 2.5 billion euros, which will be collected by remaining shareholders.

He also announced a profit-sharing plan, via dividends and share buybacks. for 6.3 billion until 2027, which now stands at 6.45 billion. This Tuesday, while rejecting BBVA's improved offer without the support of board member David Martínez Guzmán (the Mexican investor with a 3.86% stake), it increased the 2025 interim remuneration from the planned 1.3 billion to 1.45 billion. This was Sabadell's latest counterattack in this process, which is now about to reach seventeen months. The improved remuneration will be paid on November 13, once the takeover bid is completed, the acceptance period for which ends on October 10, with the aim of retaining the maximum number of shareholders.

BBVA has also been involved in unexpected twists and turns, such as the improvement in supply last week, after reiterating that he wouldn't improve it: "The offer is what it is," President Carlos Torres asserted. And the second twist is from this Monday: a record interim dividend of 32 cents per share, which will be paid on November 7, once the takeover bid is settled. This is a clear message not only to its shareholders, but also to attract Sabadell's shareholders, who comprise some 200,000 small shareholders who account for more than 40% of the capital. It is also conducting a campaign with intensive analysts and institutional investors. One of these, BlackRock, is the largest individual shareholder in BBVA (7.158%) and Sabadell (7.128%).

The Catalan bank believes the takeover bid is like a "plug" that hinders its potential and its policy of alliances with European entities, as explained by its chairman, Josep Oliu, in an interview with ARA. Proportionately, the costs of defending itself are higher for Sabadell because it is a smaller bank. According to Oliu, the bank wanted to isolate the team working on the takeover bid from its day-to-day operations, led by Carles Ventura, general manager of corporate, network, and private banking, although this is very difficult. Oliu and CEO César González-Bueno are leading the defensive efforts, which also involve Virginia Zafra, general manager of communications; Sergio Palavecino, finance manager, meeting with institutional investors; and Gonzalo Barettino, legal manager. Sabadell hired investment banks Goldman Sachs and Morgan Stanley, as well as Evercore, as advisors. He also has the Uría Menéndez law firm and the public affairs groups Roman Reputation Matters and LLYC.

BBVA, for its part, in addition to its chairman, Carlos Torres, and CEO, Onur Genç, has a battalion dedicated to seeking support for the takeover bid. Chief financial officer, Luisa Gómez Bravo, and the head of business in Spain, Peio Belausteguigoitia, stand out. The bank, which is listed in the US, also needs to sell the operation outside of Spain. It has hired banks such as JP Morgan, UBS, Rothschild, and Mediobanca; law firms such as Garrigues and Davis Polk & Wardwell; consulting firms such as Deloitte and Acento (a firm specializing in public affairs with former politicians such as Alfonso Alonso of the People's Party and José Blanco, the former Minister of Public Works of the Socialist Party); and Atrevia for communications and public relations.