Sant CugatThe acquisition of the British subsidiary of Banc Sabadell, TSB, by Santander for up to €3.4 billion, which was announced this Tuesday, has significant implications for the hostile takeover bid by BBVA. Initially, TSB accounts for 17% of Sabadell's business, so without the subsidiary, it becomes a smaller and less attractive bank for BBVA. However, Sabadell's CEO, César González-Bueno, stated this Wednesday in a press conference at the Sant Cugat headquarters that the sale of TSB "is not a shield" for the takeover bid and is "independent," while emphasizing that it "increases the value of Sabadell."
"It has nothing to do with the takeover bid," the CEO reiterated several times during a press conference to provide details of the sale of TSB. However, with this transaction, Sabadell will distribute an extraordinary dividend of €0.50 per share—a total of €2.5 billion—when the sale is completed in early 2026, "which will represent a return of more than 18% for shareholders," he stated. This money is in addition to the €1.3 billion in dividends that the bank is distributing this year. Thus, this transaction will allow the entity affected by the takeover bid to further fuel the flood of dividends, a remuneration that has been, since the beginning of the takeover bid, the most important. big weapon of both banks to try to convince its shareholders.
The market has welcomed the operation. After the operation became known, Sabadell closed the day with a rise of 5.22%., to €2.843—investors also rewarded Santander, which appreciated by 2.23%. This increase in the share price causes the negative premium with respect to BBVA shares to deepen. Until now, it was already more profitable for Sabadell shareholders to sell the bank's shares on the market than to participate in the takeover bid, due to the gap between what BBVA is offering per Sabadell share and its value; a premium that, with the latest increases, "is currently around -10%."
Asked whether he believes this sale could force the Bilbao bank to reconsider its takeover bid, González-Bueno asserted that "BBVA's decision to go ahead or not depends on them," but admitted that it makes the operation BBVA wants to pursue "more difficult." "If before we considered the price [offered by BBVA] insufficient, now it is probably even more so," said the executive.
United Kingdom, a complicated conquest
In 2015, Sabadell acquired 100% of TSB with an initial investment of £1.7 billion—it did so with a £1.6 billion capital increase—and the migration was not easy. Along the way, it lost time and money, but ten years later, the Valles-based bank assures that "it was a good move."
"We have doubled its value in ten years," said the Sabadell executive. Thus, they affirm that the objective of the operation is to "maximize shareholder remuneration" and that "the commitment to distribute the excess capital of more than 13%" will be maintained. González-Bueno also noted that, even if the takeover bid goes ahead, the new board "cannot reduce the rights previously acquired by shareholders," so those who retained Sabadell shares would receive that dividend.
Duty of Passivity
Since it became involved in the hostile takeover bid, Sabadell has a duty of passivity, which means it cannot make any move to hinder the operation. Hence, the bank's executive reiterated that the sale of TSB "has nothing to do" with the takeover bid, which "is neutral." Regarding the duty of passivity, González-Bueno stated that, "at the time of a takeover bid, decisions that would normally be made by the management team become the responsibility of the shareholders' meeting," which will be held in an extraordinary capacity on August 6. "Therefore, there is no breach of the duty of passivity if the decision is made by the general shareholders' meeting," he recalled.
"We had received interest in TSB in the past, but we weren't interested at that time; now we have received it again and we see that it is a good operation, both for Santander and for us, and it has coincided with this timing," the executive explained.
González-Bueno also said that he doesn't foresee "any more hostile takeover bids" in the future, despite the fact that without TSB, it will become a somewhat smaller and, therefore, more exploitable entity. Regarding other possible agreements or mergers, "any friendly merger between any of the remaining players is possible," because "there are possibilities and a great deal of complementarity between small and medium-sized companies in Spain." "Any transaction would make sense between any of them, but at the moment we don't foresee anything in the market," he explained. However, he maintained, "this transaction [the sale of TSB] is neutral" in this regard.
Parliament asks the State to "deny authorization" of the takeover bid for BBVA
The Parliament's plenary session approved this Wednesday a resolution proposed by ERC (Republican Socialist Workers' Party) calling on the State to "deny authorization of the takeover bid that BBVA has filed for Banc Sabadell." This initiative was approved with the votes in favor of Junts, ERC, Comuns, CUP, and Aliança Catalana (AC), the votes against of the PP and Vox, and the abstention of PSC-Units.
The proposal comes after BBVA announced on Monday its decision to maintain its takeover bid for Sabadell despite the conditions imposed by the Spanish government. The text demands that the executive branch deny authorization of the takeover bid "in the interest of the general public and in order to ensure the territorial economic balance that the State must guarantee by preserving a policy of job stability."
