Torres (BBVA) rules out the Spanish government tightening its takeover bid for Sabadell: "I'm not worried."

SantanderA year ago, BBVA President Carlos Torres and Economy Minister Carlos Cuerpo they met in Santander within the framework of the summer course organized by the Association of Economic Information Journalists (APIE) at Menéndez Pelayo University, and sponsored by BBVA itself. The Bilbao-based bank's hostile takeover bid for Banc Sabadell was already on the table, and both parties spoke naturally, despite disagreements surrounding the operation. This Monday, at the same sessions and with the operation still pending, that image was not repeated—although the body had initially confirmed its participation. However, they are more attentive than ever to each other.

In less than 24 hours, the Council of Ministers must decide whether to require BBVA to impose additional conditions beyond those approved by the Competition Authority when it authorized the operation. "I'm not worried [about what the government might say]," Torres stated this Monday. "There's little point in speculating [...]. I fully trust that, whatever happens, it will be the Banc Sabadell shareholders who will have the final say [on the takeover bid]," the executive reiterated.

Torres is overwhelmingly convinced that he doesn't foresee a scenario in which the outcome of the takeover bid doesn't depend on the pronouncement of Sabadell shareholders (whether they decide to sell their shares or not). But the forcefulness with which he defended it has been somewhat different from what he conveyed last Wednesday, when in an interview on Onda Cero he recalled that BBVA could opt for the judicial route if the government hinders the takeover bid. He also expressed no doubt about his continued role as president of the entity even if plans change: "I'm not considering stepping down," he stated. The possibility that the Spanish government could jeopardize the takeover bid if it imposes more conditions is not ruled out, considering that Pedro Sánchez's administration has never liked the operation.

The possibility of suspending listing

Whatever the Cabinet decides this Tuesday will presumably be announced at market close, or at least this would be the "ideal" scenario for Torres, considering the potential impact on bank stock prices. In fact, Carlos Cuerpo is scheduled to participate in the APIE conference via a video press conference this Tuesday afternoon to outline the details of the decision.

In this regard, the president of the National Securities Market Commission (CNMV), Carlos San Basilio, has indicated that he is in contact with the Spanish government and, specifically, with the Ministry of Economy to suspend the trading of the entities, if necessary: "The CNMV prefers the decision to be announced at market close, so we can suspend trading as quickly as possible so that everyone has all the information available," said San Basilio during his participation in the same economic conference this Monday. This suspension would take place before the Council of Ministers meeting, with the idea of lifting it once the government's decision is known. In any case, waiting until the stock market closes also carries risks, the CNMV chairman acknowledged, such as leaks or speculation about the government's possible terms.

TSB and the duty of passivity

Regarding the possible sale of TSB, the British subsidiary of Sabadell, Torres reiterated that he "doesn't see it as suitable." The executive noted that among the range of options that could lead BBVA to withdraw the offer is Sabadell divesting itself of this business. "It's a legal possibility," he admitted, although he declined to enter into "speculation." In fact, he indicated that the information currently available on this move is "confusing." Financial sources consulted by ARA indicate that the TSB transaction is "on track."

This is where the duty of passivity comes into play, which restricts what the board of directors of a company for which a takeover bid has been launched, in this case Banc Sabadell, can do. The CNMV is already investigating whether the bank chaired by Josep Oliu has breached its obligations, something that "so far" has not been detected, explained the bank's chairman. The agency is assessing how the potential sale of TSB "fits" with this obligation. If it could jeopardize the success of the takeover bid, the shareholders' meeting will have to decide.

Acceptance period until September

However, Torres has indicated that once the Spanish government makes its decision, he wants to expedite the approval of the prospectus (the document that must contain all the information about the transaction) by the CNMV and then open the acceptance period (when Sabadell shareholders can vote). In fact, the president of the CNMV himself has estimated the completion of this prospectus at "about two weeks," so it could be ready by the second week of July. From then on, Torres would opt for an acceptance period of either thirty days or seventy days, as stipulated by law. If he chooses the first timeframe, however, the voting would close in August, which does not convince the executive: "August is a bad scenario for everyone," he acknowledged, thus opening the door to having to choose the seventy days for the vote to be resolved in September.