After 17 months of battle, BBVA's takeover bid for Banc Sabadell has failedThe big question everyone is asking is: why? It has even surprised the Valles-based bank. Analysts and experts cite a number of reasons, and not all of them are financially related. Other reasons are political, social, and communication-related. All of this has led to BBVA failing to even achieve a 30% stake in the Catalan bank, which would have allowed it to attempt to take control of Sabadell. These are some of the reasons analysts give.

The game is over. The BBVA withdraws –this is the second time it has failed in its attempt to integrate Banc Sabadell– and a new era is dawning. The bank chaired by Carlos Torres will now launch its strategic plan and fully compensate its shareholders, after 17 months of allocating resources to a fruitless battle.

Surely the fans of the president of BBVA, Carlos Torres Vila (Salamanca, 1966), for The Origin of Species Charles Darwin's influence has prompted him to try to take control of Banc Sabadell. He tried it in 2020, a year after becoming president of the bank, where he had been CEO since 2015, and it didn't work out. Four years later, he's back, leading an intense 17-month offensive that the Catalan bank ultimately won.

BBVA's takeover bid for Banc Sabadell is beginning to bring to mind the writer Michael Ende and his book. The Neverending Story. Among the possibilities that this process that started 17 months ago Whether it comes to an end or not, the second option is the one that seems to have the best chance. This Friday, the National Securities Market Commission (CNMV) will announce the results. The offer acceptance period for Sabadell shareholders has expired, which could mark the end of this or even open a new chapter in this soap opera that could drag on until next year. The future of the only major bank headquartered in Catalonia is at stake.

This is a seventeen-month story. That of BBVA and Banc Sabadell. One of the longest takeover bids in Spain, especially in the banking sector. And unlike usual, it was hostile, as the Catalan bank opposed it from the very beginning. This Friday, the outcome was announced: the takeover failed. Only a quarter of Sabadell's capital had agreed to BBVA's proposal.

In the face of the war of statements about a possible second takeover bid when the current BBVA takeover bid for Banc Sabadell expires, the National Securities Market Commission (CNMV) has entered the scene. The regulator, in a climate of tension between the two banks involved, states that the result of the operation will be announced on the 17th, one week after the acceptance period ends, this Friday.

There is a scenario that began to gain traction when BBVA opened the door to waiving the minimum acceptance condition for the hostile takeover bid for Banc Sabadell, set at 50.01% of the Valles-based bank's capital. This is the possibility of a second mandatory takeover bid, although BBVA has initially ruled it out.

Let's take the dictionary. Hostile: "Opposite, enemy, adverse, unfavorable, rival, adversary." Truly, BBVA's takeover bid for Sabadell fits. As the end of the takeover bid period approaches, positions harden. BBVA isn't very interested in pursuing a second takeover bid, although it has the option to do so. and ensures that it has sufficient support so that the first round is a success. And Sabadell is selling the idea that there will be a second round due to the difficulty of achieving the objectives of the first. Thus, it discourages participating in a transaction by cashing in shares, with the possibility of not being exempt from taxes because the share capital will not exceed 50.01%, and without the option of participating in a second, possibly more advantageous, part of the takeover bid.

The Mexican investor David Martínez Guzmán, The third absolute shareholder and the first individual shareholder of Banc Sabadell, with 3.86% of the capital, and director of the Catalan bank defends himself in an article in the newspaper The Country of the criticism he has received for announcing that he will participate in the takeover bid launched by BBVA. In the article, titled "This is not a battle between Montagues and Capulets", referring to the rival families of Romeo and Juliet, denounces the "incorrect interpretations, accusations, and baseless insinuations" to which he has been subjected as a director of the Catalan financial institution. Martínez bluntly states: "There is no agreement or conflict of interest between BBVA and me."

Calls, advertising, emails, calls to informational meetings... The activity is frenetic. BBVA and Banc Sabadell are accelerating their efforts to convince shareholders within the framework of the Basque bank's takeover bid for the Catalan bank. One to attract the maximum number of Sabadell shareholders and the other to prevent capital flight. The acceptance period ends on Friday, October 10, although depending on the outcome, the process could extend beyond November.

The battle between BBVA and Banc Sabadell opens a new chapter led by the Association of Minority Shareholders (AAMBS). This organization, chaired by Jordi Casas, demands clarification of the relationship between the Basque bank and the Catalan financial institution's third largest shareholder, Mexican investor David Martínez Guzmán, of which he is also a director, and who announced his acceptance of BBVA's takeover bid. The dispute is growing as the takeover bid period expires on the 10th.

They say fate is full of coincidences, and BBVA's hostile takeover bid for Banc Sabadell is no exception. The thread that opened the door to the Vallecas-based bank for multimillionaire David Martínez Guzmán (Monterrey, 1957) in 2013 is the same thread that today leads him to an exit from Sabadell's shareholding, at least as we know it now: none other than BBVA. The Mexican investor landed at Sabadell thanks to Jaume Guardiola when he was CEO of the Catalan bank. But they had known each other before. Specifically, from the time when Guardiola was Vice President and General Manager of BBVA Bancomer in Mexico. At that time, Martínez was already one of Mexico's largest fortunes and a renowned investor, something that Guardiola did not overlook when, years later, and already within Sabadell, he sought strong investors who could strengthen the bank's solvency through a capital increase, just after acquiring CAM.

A hostile takeover bid, such as BBVA's takeover of Banco Sabadell, wastes effort and resources. That's why an agreement is often sought in a sector as highly regulated as banking. The precedent was The failed attempt by the former Banco de Bilbao to take over Banesto (now part of Santander) almost 38 years ago. The fact is that the largest integration of this century was agreed upon: the absorption of Bankia, with the State as a shareholder, into CaixaBank.

BBVA has decided to go all out to attract Banc Sabadell shareholders in order to take control of the Catalan bank. The bank's board of directors, chaired by Carlos Torres, has approved a dividend of 32 cents, the largest in its history, which will not be paid until November 7th, on account of this year's results. The result of the takeover bid launched in May of last year, which is now in the final stages of the acceptance period, will be known by then. After deducting personal income tax, the net dividend amount is €0.2592.

"If there's one thing that's important to avoid in the banking sector, it's uncertainty." This reflection comes from a professor at one of Spain's most renowned business schools, who already predicts that BBVA's hostile takeover bid for Banco Sabadell will be a "case study" in classrooms. What has long been a taboo for banks has dominated this merger operation from the moment it was launched, sixteen months ago, and although its outcome could arrive in two weeks, questions remain. In fact, BBVA's latest steps push the takeover bid into a difficult situation. However, there have already been moves that have fueled uncertainty. Many of them, moreover, have been marked by contradictions.

BBVA's hostile takeover bid for Banc Sabadell has just entered a new stage with an improved offer through which the Basque bank wants to try to convince the Catalan bank's shareholders to accept the takeover bid.For now, it remains to be seen whether Monday's announcement will have an impact on investors and, therefore, on the outcome of a virtually unprecedented transaction that began sixteen months ago. However, analysts have already spoken, and, in general, BBVA's announcement has not convinced them. This Tuesday, Sabadell shares rose 1.56% to €3.28; and BBVA shares rose 1.25% to €16.175. The premium remains positive at around 3%, as on Monday, when the Basque bank announced it was improving its offer by 10%, converting to a completely all-share offering.

There's a saying that fits very well with BBVA's takeover bid for Banc Sabadell: don't mention the wheat until it's in the bag and well tied up. The takeover bid, a process that has been going on for more than sixteen months, demonstrates that things can take twists and turns, and at first go well for some and badly for others, and vice versa. At BBVA, they were tireless in saying they wouldn't improve their offer. It's obvious that this is done, but it's not said. But it's strange to insist so much when you plan to do the opposite of what you're promising. This is unless the change is due to pressure from the markets, which had been betting for months on what has ended up being done, although, according to some investors, with insufficient improvement.

"The offer is the offer," BBVA CEO Onur Genç had repeatedly insisted when asked about the possibility of improving What they offer to Banc Sabadell shareholders to accept the takeover bid. However, these words, as of Monday, have remained a dead letter.