Background on Key Players and Their Significance
Banco Sabadell, the fourth-largest bank in Spain, and BBVA, the second-largest bank in Spain with over 78 million customers across 25 countries and a strong presence in Latin America, are the central figures in this takeover saga. The outcome of this merger would create a significant European banking giant.
David Martínez, a Mexican investor, holds a 3.86% stake in Sabadell through his representation of the Fintech Europe fund, making him an influential player in this situation.
BBVA’s Improved Takeover Bid and Sabadell’s Response
BBVA recently enhanced its hostile takeover bid for Sabadell, valuing the Catalan bank at approximately €17 billion. However, Sabadell’s management council rejected the improved offer, advising shareholders not to accept it.
According to Sabadell, “The proposed price is significantly lower than the standalone value of Sabadell’s project.” The bank further stated that the total compensation for shareholders over the next three years, including dividends and share buybacks, would be superior to what they would receive by accepting the current offer.
Sabadell also increased its remuneration target for shareholders in 2025 from €1.3 billion to approximately €1.45 billion.
BBVA’s Dividend Announcement and Sabadell’s Countermove
In a strategic move, BBVA announced an exceptionally high dividend payout, which could also benefit new shareholders opting for the ongoing takeover bid set to conclude on October 10.
Sabadell, however, believes the current takeover bid will only achieve low acceptance levels. To thwart the acquisition, Sabadell sold its British subsidiary TSB to Santander for €3.1 billion and pledged to offer record-breaking returns to its shareholders, partly due to this sale.
David Martínez’s Decision Despite Council Rejection
Despite the council’s rejection, David Martínez announced his intention to cede his shares and those of Fintech Europe, representing 3.86% of Sabadell’s capital, to BBVA.
This development adds complexity to the already uncertain outcome, given the numerous small shareholders of Sabadell.
Key Questions and Answers
- What is the main issue at hand? BBVA’s improved takeover bid for Sabadell, which the latter’s management council has rejected.
- Why is David Martínez’s decision significant? His 3.86% stake in Sabadell, held through Fintech Europe, could influence the takeover’s outcome despite the council’s rejection.
- What strategies have both banks employed to strengthen their positions? BBVA announced a high dividend payout, while Sabadell sold TSB to Santander and increased its remuneration target for shareholders.
- What are the potential implications of this merger? The combination would create a major European banking player with a substantial customer base across multiple countries and a strong presence in Latin America.
- Why is the outcome uncertain? The presence of numerous small shareholders in Sabadell adds complexity to the takeover bid’s potential success.
