Background on Key Players and Relevance
César González Bueno, CEO of Banco Sabadell, has expressed concerns that the potential sale of Sabadell’s British subsidiary TSB to Santander could further complicate BBVA’s hostile takeover bid for Sabadell. This statement comes as BBVA aims to create the second-largest bank in Spain by credit volume, following Caixabank.
Who are the key players?
- BBVA: A Spanish banking group led by President Carlos Torres, aiming to acquire Sabadell.
- Sabadell: A Spanish banking group with a British subsidiary, TSB.
- Santander: Another major Spanish bank that has agreed to acquire TSB from Sabadell for £2.65 billion.
Why is this relevant?
BBVA’s potential acquisition of Sabadell is significant as it would create the second-largest bank in Spain by credit volume, just behind Caixabank. However, the proposed sale of TSB to Santander could impact BBVA’s takeover plans.
Details of the Potential TSB Sale and Its Implications
Santander has agreed to buy TSB from Sabadell for an initial £2.65 billion (approximately $3.64 billion) in a fully cash transaction, subject to approval from Sabadell’s shareholders.
Sabadell plans to use the proceeds from the sale to fund an extraordinary cash dividend of €0.50 per share (equivalent to €2.5 billion) and pay €1.3 billion in ordinary dividends, expected to be paid from 2025’s profits.
CEO González Bueno’s Perspective
González Bueno acknowledged that while the TSB sale is independent of BBVA’s offer and aimed at creating value for shareholders, “it makes the takeover more difficult or requires a higher price.”
BBVA’s Stance and Market Reactions
Despite the Spanish government blocking BBVA’s full merger with Sabadell for at least three years, BBVA has decided to proceed with its €14 billion offer for Sabadell.
Following the announcement, Sabadell’s shares rose by over 5%, while BBVA’s shares increased by 1.7%.
BBVA declined to comment on the potential impact of the TSB sale on its takeover bid.
Shareholder Approval and Regulatory Requirements
González Bueno anticipates that Sabadell’s shareholders will approve both the TSB sale and a €2.5 billion extraordinary cash distribution on August 6, subject to the Spanish stock market supervisor’s guidance on their feasibility.
Spanish law mandates that the governing bodies of a target company must seek shareholder approval before taking any action that could hinder a takeover attempt.
González Bueno clarified that the initiation of the TSB sale process was not by Sabadell but by a third party, which he deemed irrelevant to determining shareholder approval for the transaction.
Key Questions and Answers
- What is the potential impact of TSB’s sale on BBVA’s takeover bid? According to Sabadell CEO González Bueno, the sale makes BBVA’s takeover “more difficult or requires a higher price.”
- Why is BBVA pursuing the acquisition of Sabadell despite government restrictions? BBVA aims to create the second-largest bank in Spain by credit volume, following Caixabank.
- What are the details of Sabadell’s plan to use proceeds from TSB’s sale? Sabadell intends to fund an extraordinary cash dividend of €0.50 per share (€2.5 billion) and pay €1.3 billion in ordinary dividends from 2025’s profits.
- How will shareholders be involved in the TSB sale and extraordinary cash distribution? Sabadell anticipates shareholder approval for both the TSB sale and a €2.5 billion extraordinary cash distribution on August 6, pending guidance from the Spanish stock market supervisor.
