Sabadell's stock market rises more than BBVA after agreeing to sell TSB

BarcelonaBanc Sabadell has done very well in agreeing to the sale of its British subsidiary, TSB, to Santander in the midst of BBVA's hostile takeover bid. This Wednesday, the Catalan bank's shares soared to over 5% at the start of trading on the stock market, while those of the Basque bank rose by over 1%. The deal has also been successful for Santander, as its shares have appreciated by over 3%—although their growth has since slowed to 1.5%. Sabadell CEO César González-Bueno explained during a press conference on the sale agreement that the markets, given the share price performance, interpret it as "good for shareholders." In fact, it means the bank is "worth more."

All of this comes the day after Sabadell's board of directors accepted Santander's offer for its subsidiary TSB for the equivalent of approximately €3.1 billion. In any case, the amount could reach €3.4 billion in 2026, when the transaction is expected to be completed, according to information submitted to the National Securities Market Commission (CNMV).

Now all eyes are on BBVA, which announced on Monday that it was continuing with the takeover bid despite the restriction imposed by the Spanish government that prevents it from carrying out a merger for three years, which could be as long as five years. With the change in circumstances, BBVA will be forced to recalculate its synergies or cost savings, which it estimates at €850 million over three years.

Another issue on the table is the offer price, which, since January, has been below Sabadell's market price, meaning that shareholders would be better off selling today than participating in the takeover bid. Currently, the negative premium is around 10%. Furthermore, A good part of the shareholders would have to pay more personal income tax than the cash portion they would receive..

Sabadell has committed to returning another €2.5 billion to its shareholders once the acquisition is closed, that is, if approved by the extraordinary general meeting called for June 6. The call for this meeting is mandatory given that the financial institution from Vallecas is involved in a takeover bid. This will bring the distribution of profits to shareholders to a total of €3.8 billion during this period.

One of the key players in the stock market session was BBVA and Sabadell, but also the words of US Federal Reserve Chairman Jerome Powell, who announced interest rate cuts before the end of the year. The Ibex 35, the main indicator of the Spanish stock market, began the day in positive territory above the 14,000-point level.