A merger attempt marked by its heightened hostility is coming to an end. As citizens, we should rejoice that it didn't serve to increase the country's banking concentration. I don't think shareholders and employees of both necessarily have to think the same. BBVA, a large bank, has seen its strategy and the credibility of its management eroded in the medium term. The exact opposite is true for Sabadell: congratulations to its managers, but it's becoming a very complex task for them, and it's starting now. The opposite will happen to shareholders: despite Sabadell's success, the stock price is expected to suffer in the short term. Its value is falling, inflated by the same expectation of a takeover bid and an extraordinary dividend distribution that must not decapitalize the bank.
Also what its shareholder can do fractious Mexican who, like other Sabadell shareholders, may want to sell their shares now that the share price is high. The same applies to any other fund that was hoping for a better price in the second takeover bid and is now jumping ship before the share price can worsen.
On the other hand, BBVA shareholders will see their share price rise in the short term, both due to the substantial liquidity BBVA had prepared for the purchase and the interest of its managers in ingratiating themselves with shareholders. Managers versus shareholders, the short term versus the long term, sustainability versus solvency: stretching the affected vectors, there's no reason to rejoice excessively, for both sides, in a takeover bid that has dragged on for so long and has revealed the ugly side of the hostile battle (announcements, half-truths).
What actually happened, when 90% of analysts, hours before the announcement, still believed the takeover bid would go ahead? Given the shareholding structure, it is the institutional funds, which hold 35% of the votes, that have possibly betrayed BBVA, despite the complicity that the BBVA chairman had openly asserted guaranteed their commitment. It is likely that not even half of them participated in the operation. The suspicion is that they assumed the 30% would be reached without their contribution being necessary. A prisoner's dilemma in its purest form. These funds may have thought the takeover bid was a good one, but that, in order to guarantee it, it was better for another fund in the institutional group to make the effort, and then for them, fully empowered, to launch the second takeover bid and realize a few additional cents of capital gains. And one by one—letting someone else bear the cost while I maximize my profit expectations—the threshold for a second takeover bid has not been reached. Oh, greed!
Indeed, in the guesswork of what could happen, discounting the opposition of the majority of small shareholders and two significant shareholders who were clearly and openly in favor of the takeover bid and one against, and assuming the inaction of 50% of index funds and others, it was the institutional investors who failed Mr. Torre. And, in their own right, they harmed his probable interests.
At this point, Mr. González-Bueno has a big job ahead of him. Mr. Oliu deserves the respect of a good banker who, given the hostility, with the support of his legal counsel, has managed to play the David-versus-Goliath game, and will surely want a break. And shareholders will need patience and, now, proof that it wasn't a question of price but of value, given the value of Banc Sabadell's financial contribution to the country's economy.
Regarding Mr. Torres, I'll only say that he was wrong. It's what in tennis is called an unforced error: he hinted at a second takeover bid, and even though he later said it wouldn't improve its price, the shareholders didn't believe him; he had already said the same thing about the first takeover bid and hadn't kept his promise. His shareholders' meeting, after the storm has passed, will now issue a ruling on the reputational damage generated. And the one who has certainly breathed a sigh of relief is the CNMV, which, had the takeover bid gone ahead, would have had to calculate the impossible: a fair (equitable!) price for the second takeover bid. The Spanish government is also breathing a sigh of relief, having thus saved itself further legal recourse on custody issues that the European Union itself had questioned.
In short, Sabadell's unexpected success (not even its directors expected it) is basically due to BBVA's mistakes and the strategy followed by institutional funds, which, by pursuing their own course, have shot themselves in the foot. Long live Sabadell, then. Now it's time to do things right, without the bottleneck imposed for a year and a half by the sufficiently manifest hostility of someone who was considered a colleague within the banking oligarchy.
