BBVA and Sabadell are in the midst of a heated debate over the takeover bid just days before the final outcome.

MadridWith just over three days to go until the end of the acceptance period for BBVA's hostile takeover bid for Banc Sabadell, both banks are at full throttle over the operation. Not only are they not hesitating to put all their cards on the line, but they have also raised their tone. The latest reason behind this crossfire is the scenario of a hypothetical second takeover bid and its price, which must be "fair." While BBVA maintains that this price, that is, the offer, will not improve, Sabadell has suggested that it could.

"I have never entered into confrontation, but what is happening in the market [with the takeover bid] is unacceptable," said BBVA CEO Onur Genç this Tuesday during a speech at a forum organized by Expansion and the consulting firm KPMG in Madrid. Genç was thus referring to the information released by Sabadell executives regarding a possible second takeover bid and its price. "[What Sabadell is doing] is not correct, nor is it acceptable [...] to suggest that it is worth waiting for a second offer," Genç reiterated.

BBVA maintains that, should a second takeover bid be necessary, the offer price would be the same as the current one, with the only difference being that it would have to be in cash. It should be noted that a second takeover bid would only take place if only between 30% and 50% of Sabadell's share capital participates in the current takeover bid. The acceptance or voting period ends this Friday the 10th, but the results will not be known until next week, probably on Thursday the 16th or Friday the 17th.

In this context, if BBVA continues with the process because it waives the minimum acceptance condition of 50% that has been suggested, it is based on what must be, according to the regulations, "fair" (both banks disagree on the exact legal definition of this concept), and it must be validated by the National Securities Market Commission (CNMV, the state stock market regulator).

Sabadell asks for more control from the CNMV

"The price could be higher," Sabadell CEO César González-Bueno noted this Monday. This possibility is what has led the Vallesan bank to propose to the CNMV that it should increase its control over Sabadell shareholders who have announced they will accept BBVA's offer. This Tuesday, the entity chaired by Josep Oliu asked the stock market regulator to "preemptively" adopt a "public criterion" that "all shareholders of the financial institution who wish to make public their intentions regarding BBVA's takeover bid must comply with," with the aim of "avoiding potential market manipulation."

With this request, Sabadell materializes the challenge it posed. this Monday González-Bueno, after shareholder David Martínez (who controls 3.89% of the bank's capital) announced last week that he would participate in the takeover bid: "Whoever participates in the takeover bid, let them do so irrevocably," the Catalan bank's executive said yesterday.

In a letter sent to the CNMV, Sabadell requests that all these investors be required to detail their stake in the bank's shares and to "firmly and irrevocably" guarantee that they will participate in the takeover bid for 100% of the company's share capital. The Valle del Cauca-based bank also requests that they be required to disclose any "existing additional interest," such as debt instruments. It also demands that the regulator "immediately correct" the actions of any retail shareholder who has stated they will participate in the takeover bid so that they can provide all the requested information.

The ultimate goal is for all these shareholders who publicly announce their intention to accept BBVA's offer to "ensure they comply with their communication" and not back down later due to the possibility of a second takeover bid at a better price, Sabadell points out. "If a hare emerges saying they will participate in the takeover bid, let them do so irrevocably so that we can be certain they are not trying to drag the market down and end up with a second takeover bid," González-Bueno reflected yesterday.

The acceptance period for BBVA's hostile takeover bid for Sabadell ends this Friday, October 10th. This means that Sabadell shareholders who want to participate in the takeover bid have until that day to decide. In this regard, the BBVA CEO has insisted that all institutional investors will participate in the takeover bid. "We have had conversations with everyone [...]. Everyone sees the operation as rational," he said. A statement that, in any case, differs from what Sabadell defends, which believes that BBVA will not reach 50% of the share capital. The give and take coincides with Zurich insurance company's announcement, the Catalan bank's second largest shareholder, which will not participate in the takeover bid.