The Government has made a decision that very few foresaw regarding BBVA's purchase offer (OPA) on Sabadell. The market had been waiting for Moncloa for a while to change the conditions approved by the National Commission of Markets and Competition (CNMC) and reinforce them. However, he has chosen to maintain the criteria decided by the body chaired by Cani Fernandez and, on the other hand, stop the fusion of the two banks, initially, for a three -year period that can be extended to five. A period of time in which both entities will have to live independently, autonomously, even if BBVA gets to have action control and may decide who sits on the Sabadell Council.
That step has meant a script turn that changes the stages of a corporate operation that will modify the banking landscape in Spain. We analyze what are the options on the table.
On the one hand, the BBVA can withdraw the offer. On the other, it can resort to the courts, as it has already dropped. You can also accept the game dashboard determined in the Council of Ministers and move on waiting for another public agency, the National Securities Market Commission (CNMV) to approve the purchase brochure – where it details all economic and financial conditions – and Sabadell's shareholders choose to sell their actions or not.
BBVA can withdraw its offer
The bank chaired by Carlos Torres has always saved that ace in the sleeve. On several occasions he has assured that if the conditions marked by the Government – or before the CNMC – they did not convince him, he could withdraw the offer and move forward with his solo activity.
That step could be a setback for the management of Torres, because it would be the second time that BBVA tries to buy Sabadell and the operation does not end up materializing. They already maintained negotiations in 2020. Then, the dialogue between the two entities did not bear fruit and no formal offer was presented, as it happened in the spring of 2024.
At the moment, BBVA has assured that “the government's decision is evaluating”, so nothing can be final. In addition, Carlos Torres ruled out a few days ago to present his resignation, in case of facing a new setback. “Not at all,” he said in an interview. “From the beginning we have transferred what was (a offer) responsible. A year ago we began the conversations, they leaked and had to make the offer public,” he argued. Without that filtration, who knows if the proposal would have been confirmed.
At the moment, investors do not see a loss of value or potential. After the agreement of the Council of Ministers, the BBVA closed Tuesday's session with a rise of 2.54%; and Sabadell, 0.45%. The Catalan bank closed the session at 2,698 euros per share. It must be remembered that BBVA offers its own action plus 0.7 euros in exchange for 5,3459 Titles of Sabadell, which lies almost 5% above that assessment proposed by BBVA.
Go to court
At the same time he ruled out, Carlos Torres opened the door to take the conditions agreed by the Government to the courts. When he said it he still did not know that the Council of Ministers was going to maintain the criteria decided by the CNMC, with which BBVA agreed, but preventing the merger. An option, to keep the paths separately, which BBVA has also assumed several times that could happen.
“The government cannot prevent the OPA either de facto,” Torres justified in an interview in Wave Zero. “What should happen is that the operation passes as soon as possible to the scope of decision,” referring to Sabadell's shareholders. “Our interpretation of the Competition Defense Law is that (the Government) can maintain or soften”, the requirements marked by the CNMC.
Moncloa has maintained these conditions, but, based on “criteria of general interest”, it demands that banks walk and live separately, for those three expandable years, although the BBVA takes action control. In fact, the Law of Defense of Competition requires that the Government, when it reviews the conditions agreed by the CNMC in operations of this type, where it has to “authorize the concentration”, to “duly motivated in reasons of general interest different from the defense of the competition”.
If you use the courts, a scenario opens on which there is no background, so it is difficult to anticipate what would happen to the offer: if it would stop and for how long, how it would affect the price and day to day of both banks.
The Minister of Economy does not believe there are problems. “The legal angle has been covered from the beginning. The first thing we did was a legal analysis of the pitch, about the possibilities that the Council of Ministers had. We are not preventing the operation. We give way to the next stage, where it is up to him to speak, if BBVA continues, to Sabadell's shareholders,” said body.
Move on and that shareholders decide
BBVA can also move forward and accept the scenario raised by the Government. In that case, the offer would go to the CNMV. The stock market supervisor must assess the purchase brochure where BBVA details all the economic and financial conditions of the operation, so that Sabadell's shareholders decide whether or not to sell their titles.
The CNMV has to approve the brochure. It is a legal requirement that, until now, has not done because I was waiting to see what it said, first, competition; Then, the government. Only once the clock is approved, the time in which Sabadell's investors can sell their shares, if they are convinced the proposed conditions.
That period of acceptance will be 30 calendar days, although BBVA may ask that it lasts up to 70 calendar days. Once that term passes, which can take the OPA until September or even, beyond, it will be known how many Sabadell actions BBVA has. A minimum limit was marked, because he conditioned the operation to obtain an acceptance of at least 49.3% of Sabadell's capital.
In this way, it could happen that BBVA has almost half of Sabadell's actions in a few months, he can appoint the counselors and executives of the Catalan Bank, depending on what allows their participation, and maintain the individual management required by the Government, but without merge. Nor is it a scenario that is strange. For more than a decade, BBVA had less than 50% of the actions of the Turkish Bank guaranteed and, in that case, did not see it as an impediment.
If the conditions that the Government have marked, either in three or five years, there may be fusion. “From there, there will be no additional extensions, the following government entry would be if the entities decide to merge according to the 2014 Solvency Law,” Carlos Corps acknowledged, in a meeting with journalists in Santander.
What would happen if there is a change of government in these next years? The Minister of Economy pointed out that the future executive “will be” with “BBVA's obligation to put on the table the reports” in which the independence of the two entities must make clear over the three or five years. “It is a guarantee element, because it is aligned with the deadlines imposed by the CNMC,” he argued.
