BBVA, desperate to obtain the support of its shareholders for the takeover bid for Sabadell

The pressure in the BBVA is increasing as one of the key events approaches to clear the path of Takeover bid that it has launched to take over Banco Sabadellthe extraordinary shareholders meeting on July 5summoned by its board of directors to approve an issue of shares with which to finance the operation of its competitor.

The address of the entity, with Carlos Torres at the head, has launched in recent days a campaign to try to persuade its shareholders at all costs to support the expansion. The bank has ordered its offices to be in telephone contact with those clients who own BBVA shares and convince them to vote in favor of the capital increase, as confirmed to LA RAZÓN by sources familiar with the matter, who emphasize the great pressure that the bank is exerting on its branch network to convince shareholders.

In parallel to this action, Torres, in a video released this week by the entity, has also urged all BBVA shareholders to participate in the meeting and to support the proposed capital increase to continue with the takeover bid.

Torres Video

In the message, Torres, who is risking a good part of his credibility and probably his future at the head of the entity with the operation on Sabadell, assures that “the union of both entities will reinforce our positioning and scale in the Spanish market, and “This way we will achieve greater efficiency and profitability.”

The banker also highlights that for BBVA shareholders, the merger of both entities represents a clear generation of value, since, on the one hand, they will be part of a “stronger and more competitive” bank and, on the other, they will be able to increase returns. of the investment with a limited impact on the capital ratio. All of this, he adds, is combined with an “attractive” shareholder remuneration policy by BBVA, which involves distributing between 40% and 50% of the profit each year. Furthermore, Torres reiterates the intention to distribute any excess capital above 12%, which continues to leave the door open to new share repurchase plans or even the payment of extraordinary dividends.

The capital increase is key for the operation to go ahead because BBVA needs it to carry out the share exchange with Sabadell that it has proposed for the takeover bid to prosper.

The capital increase is necessary to face the exchange of shares of the operation

The maximum nominal amount of the increase proposed by BBVA management will be 551.9 million euros and will be carried out with non-monetary contributions, through the issuance and putting into circulation of up to 1,126 million shares, of 0.49 euros nominal value eachof the same class and with the same rights and obligations as the BBVA shares currently in circulation.

BBVA is not having an easy operation fundamentally because no one wants it, except the entity itself. The first to reject it was Banco Sabadell itself, which has assured that the offer “significantly undervalues” the Sabadell project and its growth prospects as an independent entity.

The refusal of the entity chaired by Josep Oliu has turned the takeover bid into hostilewhich further complicates – by not having the support of the Sabadell management for its shareholders – an operation to which the Government is also frontally opposed.

He Minister of Economy, Carlos Corpohas insisted on numerous occasions in recent weeks that the Executive opposes the operation because of what it entails. reduction of competition, especially in Catalonia and the Valencian Community, where both entities are more established. In fact, Corps has warned that, although it does not have any power over the takeover bid, it does have power over a hypothetical merger. And on that I would have the last word.

Economía considers that if a union between BBVA and Sabadell comes to fruition, it would mean a increase in the level of concentration “which could have a negative impact on employment and the provision of financial services”and refers to the assessments that the until now governor of the Bank of Spain, Pablo Hernández de Cos, in which he has expressed his suspicion of an “excessive” banking concentration. Along these same lines, from Economía they assure that “an excessive level of concentration would introduce an additional potential risk to financial stability.”