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

SabadellLike a football match, Banc Sabadell is holding not one but two extraordinary shareholders' meetings this Wednesday. The first, like the first half of a football match, began at 10 a.m. and was 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 after it was put to a vote with overwhelming support from participants, with 99.670%. 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, are euphoric with the result and the signs of support from shareholders, which is also interpreted as an endorsement of the rejection of BBVA's takeover bid.

In the second meeting - like the second half of the game - starting at 1 p.m., things were even easier for the Catalan bank's management, given that it was necessary to support the distribution of 2.5 billion euros as a result of the sale of TSB, at a rate of 50 cents per share.

Although the bank has disassociated itself from it, the sale of TSB is taking place in the midst of BBVA's takeover bid to take control of the Catalan entity. and makes it difficult to move forwardBBVA, which has not entirely ruled out withdrawing the offer and refuses to improve it, plans to present the takeover bid prospectus next month. Sabadell's first shareholders' 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. The second meeting saw a quorum of almost 70%.

The meetings were held at the Sabadell Fairgrounds, the city to which the company returned its headquarters in the midst of BBVA's takeover bid last January. Approximately 500 people attended, despite the meeting being in the middle of the August holidays, with a higher quorum at the first meeting than at the second. The National Securities Market Commission (CNMV) urged the bank to solicit shareholder opinions at two meetings on the same day, rather than just one, to comply with the right of passivity during takeover bids.

Oliu insisted to shareholders that the transaction is unrelated to BBVA's takeover bid and highlighted its positive aspects. With this transaction, and with the intention of defeating BBVA's takeover bid due to the low bid, Sabadell intends to focus on the Spanish market. He noted that the bank had received numerous takeover bids for TSB. The divestment comes, he said, "at a particularly opportune time."

Oliu insisted that the sale will allow Sabadell to focus on the Spanish market. Thanks to the transaction, there will be an extraordinary return for shareholders, thus fulfilling the commitment to distribute everything above 13% of the capital and a "better comparison with Spanish financial institutions."

During the question and answer session, although the focus should have been on the sale of TSB, there was no shortage of praise for the board of directors in defending itself against BBVA's takeover bid, especially that of the representative of the Sabadell Minority Shareholders Association. Another issue had to do with The taxation and impact on personal income tax for shareholders if the takeover bid goes ahead..

"Zero synergies"

González-Bueno reiterated that the sale of TSB is "a very good transaction for the bank and its shareholders." He explained that they are demanding 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, once the limitations imposed by the Spanish government are applied, which involve avoiding the merger for at least three years, but potentially as long as five, "will be zero."

After this meeting, another meeting will be held at 1:00 p.m. to approve the distribution of a dividend linked to the sale of TSB for a total of 2.5 billion euros, at 50 cents per share. This dividend will be paid during the first quarter of next year, when, in principle, the BBVA takeover bid should have been resolved.

Sabadell's largest shareholder is Blackrock, with 6.856% of the capital; and BBVA, with 7.158%. The Catalan financial institution's second-largest shareholder is the insurance company Zurich, with 4.70%, with which it has a policy sales agreement.

In third place is Mexican investor David Martínez Guzmán, with 3.495%. He is followed by Fintech Europe, with 3.105%; Goldman Sachs, with 2.879%; Dimensional Fund Advisors, with 2.873%; UBS, with 2.811%; Norges Bank, with 2.177%; Vanguard, with 1.338%; Amundi, with 1.271%; DWS Investment, with 1.212%; and Qube Research, with 1.021%. In the case of BBVA, Blackrock is followed by Capital Research and Management Company, with 4.968%.

The bank, which presented its new strategic plan on July 24th 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 announced the payment of a first dividend on account of 2025 results of 0.07 euros as of August 29, which is part of the 1.3 billion euros planned for 2025, between dividends and share buybacks. In this roadmap, Sabadell plans to remunerate shareholders with 6.3 billion euros between dividends and share buybacks between 2025 and 2027, a figure equivalent to around 40% of its current stock market value.

Before the meetings, the proxy advisors ISS and Glass Lewis agreed to recommend that Sabadell shareholders vote in favor of the sale of TSB.