Oliu: "BBVA failed to see that it needed to raise the price significantly."
The president of Banc Sabadell analyzes the failure of BBVA's takeover bid for the bank he presides over.
Barcelona"I think what we didn't do well in this takeover bid was that in the final days we were convinced there would be a second bid because they would exceed 30%, and that didn't happen; therefore, we wasted time for three days," said Josep Oliu, president of Banc Sabadell. the failure of BBVA's takeover bid for the bank he presides over during a conversation at the Prisa group's World in Progress (WIP) conference, held Monday and Tuesday at the Palau de Congressos de Catalunya in Barcelona.
"BBVA failed to see that if it wanted to win this takeover bid, it would have to make a very substantial price increase, which it didn't do," Oliu noted. "A cheap hostile takeover bid, no way [impossible]", he assured. "This means that if someone in the future decides to make a hostile takeover, they should know that to win, they must substantially exceed the value of the entity that the market attributes to it, and they must do so based on synergies that allow them to provide that greater value. In this case, the conditions were there, but BBVA shorted the offer and the shareholders reacted the way they did," explained the president of Sabadell.
When asked about the lessons he has learned from the process, he recalled that during his presidency he has led 17 mergers and two "have never been done", but that both "exist".
The Sabadell project
"The risk of execution of the Sabadell project stand-alone "It's close to zero; the risk that the dividends our team has promised won't be paid is close to zero," says Oliu. "In a merger, when the dividend calculations were made after the takeover bid, it turned out that the dividends were much lower than those of Sabadell. And there were also all the risks derived from the integration," he points out.
He also assures that in the coming years the focus of the Catalonia-based bank "will not be on increasing its size" – if they do, "it will be through organic growth, through business" – but rather they will focus "on profitability, capital generation, and distribution." And that's what we will do in the next three years," assures Oliu.
When asked if the bank needs a hard core of shareholders to defend itself against other takeover bids, the bank's chairman explained that "the only hard core of an entity is strong results, a strong earnings outlook, and a strong share price."
