Sabadell shareholders en masse support the sale of the British subsidiary TSB to Santander.

SabadellAs if they were two halves of a football match, Banc Sabadell held not one, but two extraordinary shareholders' meetings this Wednesday. The first half of this type of match began at 10:00 a.m. and served to ratify the sale of the British subsidiary TSB in Santander for €3.098 billion, which could end up being close to €3.400 billion when the transaction closes in the first quarter of next year. A resounding round of applause ratified the transaction following an overwhelming favorable vote of 99.670% of participants. Sources at the bank assure that the secretary of the board, Miquel Roca, a highly experienced executive, had never seen such a high level of unanimity at a meeting. Sabadell's governing body, along with the chairman, Josep Oliu, and the CEO, César González-Bueno, at the helm, were euphoric with the result and the signs of support from shareholders, which are also interpreted as an endorsement of the rejection of the takeover bid launched by BBVA in May.

At the second meeting, starting at 1:00 PM, things were even easier, as the issue was to support the distribution of €2.5 billion in dividends resulting from the sale of TSB, at a gross rate of 50 cents per share. Only shareholders who do not participate in the takeover bid will be able to benefit from this. Genís Marfà, a pharmacist and economist who regularly attends the meetings, summed it up well during his speaking time: "[The shareholders] are not stupid." He also expressed his confidence in the decisions of Oliu and González-Bueno. The measure was approved with 99.7% of participants in favor.

During the speaking time at the second meeting, the representative of the UGT (Union of Workers' Unions), Laura Garcia, and a representative of the Intersindical (Union of Workers' Unions), criticized the bank's management for failing to compensate its employees for their efforts, unlike what is done with shareholders. Both Oliu and González-Bueno praised the behavior of the workforce and unions.

Operation "at a particularly opportune moment"

Although the bank has insisted on disassociating itself from it, the sale of TSB is taking place in the midst of a BBVA takeover bid. and makes it difficult to move forwardBBVA, which has not entirely ruled out withdrawing the offer and refuses to improve it, plans to submit the takeover bid prospectus next month for approval by the National Securities Market Commission (CNMV). Oliu insisted before shareholders that he praised the sale transaction. With this transaction and with the intention of halting BBVA's takeover bid due to considering the offer insufficient, Sabadell intends to focus on the Spanish market. The divestment comes, he said, "at a particularly opportune time." González-Bueno reiterated that the sale of TSB is "a very good transaction for the bank and its shareholders."

The first meeting had a tight quorum (excluding treasury stock) equivalent to 74.8% of the share capital, with approximately 92,000 shareholders present or represented, the highest level since 2004, according to bank sources. At the second meeting, the quorum was 73%. The meetings were held at the Sabadell Trade Fair grounds, the city to which the bank returned its headquarters last January. Approximately 500 people attended, despite the meeting being in the middle of the August holiday period. The CNMV urged the bank to split the decisions into two meetings in order to comply with the board's right of passivity during a takeover bid, as shareholder approval is required.

During the question and answer session of the first meeting, one of the issues had to do with Taxation and the impact on personal income tax for shareholders if the takeover bid goes ahead.

"Zero synergies"

The CEO also explained that they demand that BBVA's prospectus for the takeover bid be "very clear," for example, regarding whether Sabadell shareholders will receive 40 percent of the value of their current shares over the next three years and 25 percent in the first 12 months. He also asserted that the synergies (savings) from the transaction "will be zero" once the limitations imposed by the Spanish government are applied, which entail avoiding the merger for at least three years, but possibly as long as five.

Sabadell shares closed the day at €3.223, up 1.99%, and BBVA shares at €15.240, up 2.08%. Given that the premium remains negative at around 7%, Sabadell shareholders would obtain a higher price by selling their shares directly on the market than by participating in the takeover bid.

Sabadell's largest shareholder is Blackrock, with 6.865% of the capital. The fund is also a shareholder in BBVA, with 7.158%. The second largest shareholder in the Valle del Cauca bank is the insurance company Zurich, with 4.70%.

Third is Mexican investor David Martínez Guzmán, with 3.495%. He is followed by Fintech Europe (3.105%), Goldman Sachs (2.879%), Dimensional Fund Advisors (2.873%), UBS (2.811%), Norges Bank (2.177%), Vanguard (1.338%), Amundi (1.271%), and DWS Investment (1.021%).

The Valle del Cauca bank, which on July 24 presented its new strategic plan to demonstrate its viability on its own, earned €975 million in the first half of this year, 23.3% more than in the same period last year. It also announced the payment of a first dividend on account of 2025 results of €1.3 billion, expected for 2025, comprised of dividends and share buybacks. In this roadmap, Sabadell plans to remunerate shareholders with €6.3 billion in dividends and share buybacks between 2025 and 2027, a figure equivalent to around 40% of its current stock market value.