MADRID, Sept 16 (Askume) – The head of Banco Sabadell (SABE.MC) said bigger rival BBVA (BBVA.MC) was unlikely to succeed in a multi-billion euro bid against his bank.
“I think the chances of this operation being successful are very low,” Sabadell Chief Executive Cesar Gonzalez-Bueno said at a bank event in Madrid on Monday.
However, speaking on the same panel as Gonzalez-Bueno, BBVA Spain country manager Pio Belausteguigoitia said he was confident the acquisition would proceed smoothly.
In April, BBVA launched a 12 billion euro ($13.4 billion) takeover bid for all Sabadell shares, but hostility emerged in May . The plan was opposed by the Spanish government but approved by the European Central Bank on Sept. 5 .
Under Spanish law, the government cannot block a takeover bid, but it has the final say on whether to allow the two entities to merge. The takeover must also be authorized by Spain’s stock market regulator and its antitrust regulator, the CNMC.
The government believes that a merger of the two banks could have a potentially damaging effect on the Spanish financial system and impact jobs and customers.
However, Sabadell shares are up 11% from the day before the takeover bid was announced and are still up 4% from their post-hostilities price, suggesting that many investors believe BBVA will prevail.
BBVA will issue 4.83 Sabadell shares for every newly issued share, a 30% premium to the April 29 closing price.
Askume calculations show that since the offer was made, BBVA’s share price has fallen from 10.90 euros to 9.276 euros, the premium is currently just 2%, and Sabadell’s valuation is around 10.27 billion euros.
BBVA has been sanctioned by authorities in several countries where Sabadell operates, including the UK, US, France, Portugal and Morocco.
The merger of the two banks would create a bank with total assets of over 1 trillion euros.
BBVA has set a minimum approval threshold of 50.01% of Sabadell’s shares, a process the company said in May could take six to eight months to formally present to shareholders.
(1 USD = 0.8990 EUR)
