European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>The CNMC is expected to approve the deal with mild remedies, reducing regulatory uncertainty; however, a potential Phase 3 review by the government could delay timing and introduce political risk.</li>
<li>Sabadell’s standalone defense is robust, anchored in increased dividends, buybacks, and 14%+ RoTE guidance, which have helped reposition the bank as a viable independent alternative in the market.</li>
<li>The offer’s gross spread has turned negative, reflecting investor skepticism about deal success or expectations of an improved offer; the lack of a premium currently weakens BBVA’s negotiating leverage.</li>
</ul>


The CNMC is expected to approve the deal with mild remedies, reducing regulatory uncertainty; however, a potential Phase 3 review by the government could delay timing and introduce political risk.
Sabadell’s standalone defense is robust, anchored in increased dividends, buybacks, and 14%+ RoTE guidance, which have helped reposition the bank as a viable independent alternative in the market.
The offer’s gross spread has turned negative, reflecting investor skepticism about deal success or expectations of an improved offer; the lack of a premium currently weakens BBVA’s negotiating leverage.


BBVA Faces Resistance at the Vault with CNMC’s Verdict Looming

<ul>
<li>Revised Offer Terms: BBVA increased the cash payment to €0.13/Sabadell share (raising total cash outlay to €705 million), while adjusting the exchange ratio to 5.3456 Sabadell shares per BBVA share.</li>
<li>The deal requires CNMC, CNMV, and government approvals, with market skepticism evident as Sabadell's market price exceeds the offer value, signaling a low probability of success under current terms.</li>
<li>Financial Impact on BBVA: The increased cash component raises the estimated CET1 capital impact to 51bps, with potential further dilution if BBVA raises the cash payment to €0.20-€0.30 per share.</li>
</ul>


Revised Offer Terms: BBVA increased the cash payment to €0.13/Sabadell share (raising total cash outlay to €705 million), while adjusting the exchange ratio to 5.3456 Sabadell shares per BBVA share.
The deal requires CNMC, CNMV, and government approvals, with market skepticism evident as Sabadell's market price exceeds the offer value, signaling a low probability of success under current terms.
Financial Impact on BBVA: The increased cash component raises the estimated CET1 capital impact to 51bps, with potential further dilution if BBVA raises the cash payment to €0.20-€0.30 per share.


<ul>
<li>The CNMC’s provisional report requires BBVA to extend commitments to SMEs for three years instead of 18 months, a condition seen as manageable but opposed by Sabadell’s leadership.</li>
<li>BBVA's exchange offer for Sabadell values its shares at €2.37, below the market price of €2.504, implying a 5.3% shortfall, increasing pressure for BBVA to improve its bid.</li>
<li>The Spanish government opposes the takeover, and political intervention, regulatory hurdles, and a history of failed hostile bank takeovers in Europe could significantly impact the deal’s success.</li>
</ul>


The CNMC’s provisional report requires BBVA to extend commitments to SMEs for three years instead of 18 months, a condition seen as manageable but opposed by Sabadell’s leadership.
BBVA's exchange offer for Sabadell values its shares at €2.37, below the market price of €2.504, implying a 5.3% shortfall, increasing pressure for BBVA to improve its bid.
The Spanish government opposes the takeover, and political intervention, regulatory hurdles, and a history of failed hostile bank takeovers in Europe could significantly impact the deal’s success.


BBVA/Sabadell: Implications of CNMC Decision, How Much Should BBVA Raise?

<ul>
<li>Sabadell plans a €500 million share buyback to maintain stock value, reducing the attractiveness of BBVA’s exchange offer and increasing shareholder resistance to the takeover.</li>
<li>Regulatory scrutiny intensifies as BBVA-Sabadell would control 39.63% of Catalonian banking credit, raising competition concerns, particularly in SME lending and payment services.</li>
<li>The market expects BBVA to raise its offer by 10-20%, but BBVA’s CEO insists there is “no room” for improvement, making shareholder approval uncertain.</li>
</ul>


Sabadell plans a €500 million share buyback to maintain stock value, reducing the attractiveness of BBVA’s exchange offer and increasing shareholder resistance to the takeover.
Regulatory scrutiny intensifies as BBVA-Sabadell would control 39.63% of Catalonian banking credit, raising competition concerns, particularly in SME lending and payment services.
The market expects BBVA to raise its offer by 10-20%, but BBVA’s CEO insists there is “no room” for improvement, making shareholder approval uncertain.


Sabadell’s Dividend Strategy and the BBVA Takeover Bid

<ul>
<li>Lower Acceptance Threshold: BBVA reduced its tender offer threshold to 49.3%, excluding Sabadell’s 1.4% treasury shares to ensure voting rights focus on active shareholders.</li>
<li>Shareholder and Regulatory Hurdles: Retail shareholder resistance, extended antitrust reviews, and opposition from Spanish and Catalonian governments complicate the takeover.</li>
<li>Sabadell’s Defensive Moves: A €2.9 billion shareholder return plan, potential treasury share expansion to 10%, and Zurich’s 3% stake further reduce the offer's likelihood of success.</li>
</ul>


Lower Acceptance Threshold: BBVA reduced its tender offer threshold to 49.3%, excluding Sabadell’s 1.4% treasury shares to ensure voting rights focus on active shareholders.
Shareholder and Regulatory Hurdles: Retail shareholder resistance, extended antitrust reviews, and opposition from Spanish and Catalonian governments complicate the takeover.
Sabadell’s Defensive Moves: A €2.9 billion shareholder return plan, potential treasury share expansion to 10%, and Zurich’s 3% stake further reduce the offer's likelihood of success.


BBVA’s Bid for Sabadell: A Tough Road Ahead

Spain

Banco de Sabadell SA attracts deposits and offers commercial banking services. The Bank offers mortgage, consumer, student, and building improvement loans, private banking services, and insurance, and sponsors Visa credit cards.  The Bank operates branches throughout Spain, elsewhere in Europe, the Caribbean, the Americas, and Asia.

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Banco De Sabadell SA (SAB SM)

BBVA Faces Resistance at the Vault with CNMC’s Verdict Looming

BBVA’s hostile bid for Sabadell faces regulatory, political, and market hurdles. As the CNMC decision nears, I analyze deal economics, timing, and...

Jesus Rodriguez Aguilar

BBVA/Sabadell: Updated Terms

BBVA revises offer terms for Sabadell acquisition, increasing cash payment to €0.13/share and adjusting exchange ratio, facing market skepticism...

Jesus Rodriguez Aguilar

BBVA/Sabadell: Implications of CNMC Decision, How Much Should BBVA Raise?

CNMC requires BBVA to extend commitments to SMEs for 3 years, Sabadell's leadership opposes. BBVA's offer for Sabadell undervalues shares,...

Jesus Rodriguez Aguilar

Sabadell’s Dividend Strategy and the BBVA Takeover Bid

Sabadell's dividend and share buyback plan complicates BBVA's takeover bid, facing regulatory concerns and uncertain shareholder approval.

Jesus Rodriguez Aguilar

BBVA’s Bid for Sabadell: A Tough Road Ahead

BBVA faces challenges in Sabadell takeover as lower acceptance threshold, shareholder resistance, and defensive moves by Sabadell complicate the...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

BBVA Faces Resistance at the Vault with CNMC’s Verdict Looming

BBVA’s hostile bid for Sabadell faces regulatory, political, and market hurdles. As the CNMC decision nears, I analyze deal economics, timing, and...

Jesus Rodriguez Aguilar

BBVA/Sabadell: Updated Terms

​BBVA revises offer terms for Sabadell acquisition, increasing cash payment to €0.13/share and adjusting exchange ratio, facing market skepticism...

Jesus Rodriguez Aguilar

BBVA/Sabadell: Implications of CNMC Decision, How Much Should BBVA Raise?

​CNMC requires BBVA to extend commitments to SMEs for 3 years, Sabadell's leadership opposes. BBVA's offer for Sabadell undervalues shares,...

Jesus Rodriguez Aguilar

Sabadell’s Dividend Strategy and the BBVA Takeover Bid

​Sabadell's dividend and share buyback plan complicates BBVA's takeover bid, facing regulatory concerns and uncertain shareholder approval.

Jesus Rodriguez Aguilar

BBVA’s Bid for Sabadell: A Tough Road Ahead

​BBVA faces challenges in Sabadell takeover as lower acceptance threshold, shareholder resistance, and defensive moves by Sabadell complicate the...

Jesus Rodriguez Aguilar

BBVA revises offer terms for Sabadell acquisition, increasing cash payment to €0.13/share and adjusting exchange ratio, facing market skepticism...

CNMC requires BBVA to extend commitments to SMEs for 3 years, Sabadell's leadership opposes. BBVA's offer for Sabadell undervalues shares,...

Sabadell's dividend and share buyback plan complicates BBVA's takeover bid, facing regulatory concerns and uncertain shareholder approval.

BBVA faces challenges in Sabadell takeover as lower acceptance threshold, shareholder resistance, and defensive moves by Sabadell complicate the...