BBVA sends the updated prospectus for the Sabadell takeover bid to the CNMV.

BarcelonaBBVA has submitted the updated prospectus for the takeover bid for Banc Sabadell to the National Securities Market Commission (CNMV), sources familiar with the process confirmed to ARA. The Basque bank maintains its offer despite the sale of Sabadell's British subsidiary, TSB, to Santander, announced last week. The text incorporates both the limitations agreed by the Spanish government in the transaction, the impossibility of carrying out a merger for three years, which could be as long as five, and the sale of Sabadell's British subsidiary.

The CNMV expects to approve the prospectus by the end of this month. Hours before BBVA's decision, CNMV Chairman Carlos San Basilio had assured reporters after speaking at an event organized by Cecabank in Madrid that the "expected" scenario is for the text to be approved this month, although everything depended on the timing set by BBVA. The bank chaired by Carlos Torres has opted to adapt to the deadlines for a takeover bid launched fifteen months ago. Last week, the bank notified the CNMV that it was continuing with the operation.

The takeover bid has become more complicated after Sabadell agreed last week to sell its British subsidiary, TSB, to Santander. Furthermore, the Catalan bank plans to distribute an extraordinary dividend of 2.5 billion euros (0.50 cents per share) when the transaction is completed, during the first half of next year. Sabadell will have to hold two extraordinary shareholders' meetings on August 6th, at the request of the CNMV. One will be to ratify the sale of TSB and the other to approve the dividend. Since the announcement of the sale, Sabadell's share price has further distanced itself from BBVA's offer, which all analysts expect to be better.

"Our scenario is still to be able to approve the prospectus before the end of July, that is, before the [Banco Sabadell] general meeting. Because the general meeting really opens up two scenarios, but two known scenarios," San Basilio explained.

Two scenarios

"If the sale is approved with the dividend, this is a scenario that we think should be reflected in the prospectus. If the sale is not approved, it would be another scenario, which should also be reflected," he said. In any case, he noted that the timing depends on BBVA. "Ideally, we would like to approve before the end of July, because we believe the information is known and the scenarios are fairly controlled, but it doesn't depend solely on us," he added. Regarding the possibility of issuing a supplement to the prospectus, which San Basilio himself raised in June, he now indicated that it is a decision that has not been made.

Regarding the acceptance period for the takeover bid, San Basilio explained that the impact it may have in August is of little relevance. Given that BBVA must decide on a timeframe of at least one month because it is affected by US legislation, and given that the prospectus will be approved at the earliest by the end of July, the acceptance period would naturally end in September. Both BBVA and the CNMV believe that it would be undesirable for the acceptance period to end in August.

Likewise, the prospectus must specify whether the offered price is considered a fair price, which is the one that would allow BBVA, once the takeover bid is completed, to maintain its stake, even if it is between 30% and 50%. San Basilio indicated that this is one of the issues the CNMV must discuss with the Basque-based entity to see if it is included.