Sabadell's show of strength to confront the takeover bid
The Catalan bank vindicates itself in an emotional return to the co-capital of Vallesana, which applauds Oliu.
SabadellA minute-long applause, emotion on the president's face, tears in the front rows. It was the culminating moment of the eagerly awaited general shareholders' meeting of Banc Sabadell held this Thursday in the co-capital of Vallès. The ovation was led by Josep Oliu, and the message was clear: a show of strength in the face of the threat of a takeover bid.
The general shareholders' meetings of the large Ibex35 companies are usually cold, bureaucratic events that take place in large, empty venues. But this Thursday's meeting in Sabadell was anything but ordinary. Banc Sabadell was returning to its hometown seven years later, having relocated its headquarters to Alicante after October 1, 2017. The meeting was also held with a degree of drama: it could be the last for the historic Catalan bank, now 144 years old, following the hostile takeover bid presented by BB.
Expectations were high, and nearly a thousand shareholders attended the Fair in the co-capital of Vallecas. The atmosphere contrasted not only with the meetings held in Alicante, but also with the shareholder meetings held in Catalonia before 2017, without the existential threat posed by BBVA's takeover bid. Josep Oliu, president of the Catalan bank, addressed the shareholders with the aim of vindicating the 2024 financial year, defending the bank's current project, and offering arguments to convince shareholders to vote. No to the offer from the Biscayan entity.
From 2,000 to 15,000 million
Regarding the first point, Oliu boasted of last year's historic results, with €1.827 billion in profits and a return on tangible assets of 14.9%: "I am pleased to say that Banco Sabadell is the company that offered the highest dividend yield in 2024 among Spanish listed banks." All of this led to a sharp rise in the share price, which reached 79% over the past year. Sabadell, which in 2020 experienced the difficult situation of having its share price below 30 cents, is now trading at €2.74, and Oliu has already announced that forecasts suggest the share price could rise above €3 this year.
In large numbers: Sabadell, which was worth around €2 billion in BBVA's previous approach in 2020, is now valued at over €15 billion.
Oliu, who addressed the shareholders in Spanish, also championed the bank's project. And, as he did on Wednesday at a dinner in Barcelona, he insisted that Sabadell operates in the Spanish banking market, contrasting it with less economically stable countries, such as Mexico and Turkey, where BBVA has a large part of its business. "Our mission is to support our clients, whether companies or families, and Spain is the region where they are mostly located," he stated. He also highlighted the bank's commitment to SMEs and that its reason for being is "to turn their dreams into business realities."
Client rejection of the takeover bid
Regarding the takeover bid, Oliu pointed out that BBVA's offer is now outdated. "The reality is that the price achieved by the bank is substantially higher than the value initially offered by BBVA." In a 27-page speech, Oliu outlined the arguments against the operation and highlighted "the unfavorable disposition of customers, demonstrated by the more than 80 appearances of entities and associations before the CNMC." He also asserted that if the takeover bid were successful, there would be "significant customer losses." A recent ISPD/Netquest survey for the ARA indicates that Up to 43% of the entity's clients would consider changing banks if the operation were carried out.
It was at the end of his 40-minute speech that Oliu referred to the long-awaited return of the headquarters to Catalonia: "I am very pleased to have been able to hold this meeting here, back in Sabadell, the city from which the bank takes its name, where it was born, and where I was born," he said. The long ovation he received forced him to stand and greet the shareholders and revealed the emotion in a financier who is said to have cried in 2017 when the bank's headquarters were decided to move to Alicante.
A vote at leisure
As a result of the exceptional climate surrounding the meeting, the capital represented (in person and online) reached 70.2%, well above the 61.9% at the last shareholders' meeting held in Alicante.
And despite criticism from unions regarding the labor situation in the bank's commercial network and the traditional questioning of Banca Armada's loans to military industry companies, the fact is that the vote on the agenda items was resolved very comfortably for the Catalan bank, and all were approved.
Sabadell has rearmed its morale in the midst of a takeover bid, but its calm will be short-lived. This Friday, the BBVA board is expected to give overwhelming support to Carlos Torres' management, and at the beginning of April, the Competition Authority will issue a ruling more favorable to the acquiring bank than to the Catalan one.
At the end of the meeting, the chairman, Josep Oliu, said that today had been very exciting, but that it would be even more so if it could be repeated next year (which would indicate the failure of the BBVA takeover bid).
