Background on BBVA and Sabadell
BBVA, a prominent Spanish banking institution, is planning to launch its takeover bid for Sabadell, a smaller rival bank. This move aims to create the second-largest bank in Spain by credit volume, following Caixabank. The initial expected timeline for the acceptance period of this offer was late July, but BBVA now anticipates it to commence in early September.
Updated Information in the Offer Document
According to a BBVA spokesperson, this adjustment will allow the bank to incorporate the most recent information into its public offering (OPA) prospectus. This includes outcomes from Sabadell’s extraordinary meetings held on August 6th. Shareholders of Sabadell are set to vote on the agreed sale of their UK subsidiary, TSB, to Santander, as well as a special cash dividend of 2.5 billion euros (approximately 2.92 billion USD) generated from the proceeds of the divestment.
Sabadell’s Defensive Maneuver
By divesting TSB, Sabadell aims to bolster its defense against BBVA’s acquisition plan valued over 13 billion euros. This strategy intends to thwart BBVA’s attempt to consolidate with Sabadell, thereby creating the second-largest bank in Spain based on credit volume.
Regulatory Considerations
The Spanish securities supervisor supports BBVA’s proposal to ensure Sabadell shareholders have access to all relevant information before making decisions regarding the OPA. Spanish legislation mandates that a company’s governing bodies seek approval from shareholders before implementing any measures that could hinder a takeover attempt.
BBVA’s Persistence Despite Government Conditions
Despite facing restrictions from the Spanish government that prevented a full merger with Sabadell for at least three years, BBVA decided to proceed with the takeover bid. These conditions were imposed on the planned operation.
Key Questions and Answers
- What is the new expected start date for Sabadell’s takeover bid acceptance period? The acceptance period is now anticipated to begin in early September, as opposed to the initially planned late July.
- Why is BBVA updating the OPA document? BBVA intends to include the most recent information, such as results from Sabadell’s extraordinary meetings and shareholder votes on TSB sale and special dividend, in the updated OPA document.
- How does divesting TSB benefit Sabadell? By selling TSB, Sabadell aims to strengthen its position against BBVA’s acquisition plan and generate additional funds for shareholders through a special cash dividend.
- What role does the Spanish securities supervisor play in this situation? The supervisor supports BBVA’s proposal to ensure Sabadell shareholders have access to all necessary information before making decisions about the OPA.
- Why did BBVA proceed with the takeover bid despite government restrictions? Despite facing conditions that prevented a full merger with Sabadell for at least three years, BBVA decided to move forward with the acquisition plan.
