Sabadell's board will take a position on BBVA's new offer this Tuesday.
The Catalan bank is expected to reject the takeover bid again and advise its shareholders not to participate.
BarcelonaBanc Sabadell's board of directors will meet this Tuesday to assess BBVA's new offer—which improves on the first by 10%—as part of the hostile takeover bid that has been going on for almost a year and a half. The bank, chaired by Josep Oliu, is expected to reject the offer again and advise its shareholders against participating in the takeover. But now a surprise dividend is also on the table. which BBVA announced on Monday night to attract shareholders.
In a statement sent to the National Securities Market Commission (CNMV), it is reported that the board's decision will be communicated to the market throughout the day. Sabadell plans to hold a meeting with analysts and institutional investors on Tuesday to inform them of the board's opinion. This meeting will begin at 6:00 PM, and anyone interested can follow the presentation through Banc Sabadell's corporate website. Starting at 7:00 PM, the Catalan bank will hold an online press conference, also open to the public.
Last week, after BBVA announced a 10% increase in the offer, the CNMV authorized the modification of the takeover bid and extended the acceptance period to October 10. The new offer offers one BBVA share for every 4.8376 Sabadell shares. Initially, one BBVA share and €0.70 in cash were exchanged for every 5.5483 Sabadell shares.
The surprise dividend
To attract Sabadell shareholders, BBVA unexpectedly announced this Monday the distribution of a dividend of 0.32 cents to BBVA investors, which would be paid immediately after the closing of the takeover bid period—"the largest dividend in its history," the bank noted.
This dividend will be distributed on November 7th, also among shareholders who participated in the takeover bid. However, if the takeover bid has been completed but not settled before November 4th of this year, the payment date will not be November 7th, but three trading days after the date on which the offer was actually settled. This way, BBVA's new shareholders are guaranteed to "participate in the dividend," according to the bank chaired by Carlos Torres.
Given this change of scenario, the market opened this morning with both banks' shares in positive territory. BBVA opened the day's trading session up 0.40% and Sabadell up 0.15%, with the premium at 2.15% positive. Around 10:00 a.m., both banks began to fall modestly, with slight drops of -0.09% for BBVA and -0.03% for Sabadell. The outlook is for strong volatility in the coming days.