European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>The CNMC extended the BBVA-Sabadell merger review to Phase 2, adding three months to assess potential impacts and allow further stakeholder input.</li>
<li>Governmental oversight may influence or block the merger based on broader public interests, with new conditions potentially altering the acquisition terms.</li>
<li>Banco Sabadell’s robust Q3 results and excess capital position improve shareholder returns. BBVA’s offer would need an improved exchange ratio or higher cash payment to increase the deal success probability.</li>
</ul>


The CNMC extended the BBVA-Sabadell merger review to Phase 2, adding three months to assess potential impacts and allow further stakeholder input.
Governmental oversight may influence or block the merger based on broader public interests, with new conditions potentially altering the acquisition terms.
Banco Sabadell’s robust Q3 results and excess capital position improve shareholder returns. BBVA’s offer would need an improved exchange ratio or higher cash payment to increase the deal success probability.


<ul>
<li>The European Commission has until November 26 to approve or object to BBVA’s acquisition of Sabadell. If no objections are raised, the deal will be automatically approved via "tacit consent."</li>
<li>BBVA has obtained approvals from the European Central Bank, UK, US, and other competition authorities. However, the takeover still awaits authorization from Spain's National Commission on Markets and Competition (CNMC).</li>
<li>Gross spread is +3.3%. The likelihood of BBVA succeeding without a price increase (higher proportion of BBVA shares in the equation) remains questionable.</li>
</ul>


The European Commission has until November 26 to approve or object to BBVA’s acquisition of Sabadell. If no objections are raised, the deal will be automatically approved via "tacit consent."
BBVA has obtained approvals from the European Central Bank, UK, US, and other competition authorities. However, the takeover still awaits authorization from Spain's National Commission on Markets and Competition (CNMC).
Gross spread is +3.3%. The likelihood of BBVA succeeding without a price increase (higher proportion of BBVA shares in the equation) remains questionable.


BBVA/Sabadell: Update on Conditions, Positive Gross Spread

<ul>
<li>BBVA has updated its hostile takeover offer to Banco Sabadell shareholders, proposing a cash payment of €0.29 and modifying the exchange ratio to 1 BBVA SM x 5.0196 SAB SM.</li>
<li>The adjustment aims to account for the dividends paid by both banks, as outlined in the initial announcement from May 2024. Current gross spread (ex-dividend) is -2.99%.</li>
<li>I believe this adjustment (merely optical) will be insufficient to convince Sabadell’s retail shareholders, many of whom are also clients and have an emotional attachment to the bank.</li>
</ul>


BBVA has updated its hostile takeover offer to Banco Sabadell shareholders, proposing a cash payment of €0.29 and modifying the exchange ratio to 1 BBVA SM x 5.0196 SAB SM.
The adjustment aims to account for the dividends paid by both banks, as outlined in the initial announcement from May 2024. Current gross spread (ex-dividend) is -2.99%.
I believe this adjustment (merely optical) will be insufficient to convince Sabadell’s retail shareholders, many of whom are also clients and have an emotional attachment to the bank.


BBVA/Sabadell: Adjustment of Exchange Equation

<ul>
<li>Banco de Sabadell’s Q2 2024 results highlight strong performance, strategic progress, and effective capital management.</li>
<li>Sabadell is currently trading at a 0.89x P/TBV (vs. 5-y 0.41x average), accurately representing its profitability and RoTE outlook. It is also trading at 7.5x Fwd P/E.</li>
<li>BBVA’s takeover bid is unlikely to succeed unless BBVA enhances the share exchange ratio or includes some cash. Gross spread (1 BBVA x 4.83 SAB) is just 3.4%.</li>
</ul>


Banco de Sabadell’s Q2 2024 results highlight strong performance, strategic progress, and effective capital management.
Sabadell is currently trading at a 0.89x P/TBV (vs. 5-y 0.41x average), accurately representing its profitability and RoTE outlook. It is also trading at 7.5x Fwd P/E.
BBVA’s takeover bid is unlikely to succeed unless BBVA enhances the share exchange ratio or includes some cash. Gross spread (1 BBVA x 4.83 SAB) is just 3.4%.


BBVA/Sabadell: Deal Uncertainty Grows After Sabadell's Results

<ul>
<li>On 24 May, <a href="https://www.smartkarma.com/entities/banco-bilbao-vizcaya-argentari" target="_blank" data-smartkarma-citation="entities:21251:1" rel="noopener">Banco Bilbao Vizcaya Argentari (BBVA SM)</a> submitted the authorisation request for its all-stock offer for <a href="https://www.smartkarma.com/entities/banco-de-sabadell-sa" target="_blank" data-smartkarma-citation="entities:21295:1" rel="noopener">Banco De Sabadell SA (SAB SM)</a>. Closing expected to take 6-8 months.</li>
<li>Gross spread (CSP 27 May) is 7.6%, which This translates in a 52% implied probability of deal success. The fixed income market appears to share this view.</li>
<li>Nevertheless, from a long-only perspective, the risk/reward of Sabadell is interesting. The deal values Sabadell's shares at €2.07 each, an implied equity value of €11,187 million, for a 0.92 P/TBV.</li>
</ul>


On 24 May, Banco Bilbao Vizcaya Argentari (BBVA SM) submitted the authorisation request for its all-stock offer for Banco De Sabadell SA (SAB SM). Closing expected to take 6-8 months.
Gross spread (CSP 27 May) is 7.6%, which This translates in a 52% implied probability of deal success. The fixed income market appears to share this view.
Nevertheless, from a long-only perspective, the risk/reward of Sabadell is interesting. The deal values Sabadell's shares at €2.07 each, an implied equity value of €11,187 million, for a 0.92 P/TBV.


BBVA Files Hostile Offer: Conditions, Defences and Probabilities

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Banco De Sabadell SA (SAB SM)

BBVA/Sabadell: Onto Phase 2

The CNMC extended the BBVA-Sabadell merger review to Phase 2, adding three months to assess potential impacts and allow further stakeholder input.

Jesus Rodriguez Aguilar

BBVA/Sabadell: Update on Conditions, Positive Gross Spread

The European Commission has until November 26 to approve or object to BBVA’s acquisition of Sabadell. If no objections are raised, the deal will be...

Jesus Rodriguez Aguilar

BBVA/Sabadell: Adjustment of Exchange Equation

BBVA has updated its hostile takeover offer to Banco Sabadell shareholders, proposing a cash payment of €0.29 and modifying the exchange ratio to 1...

Jesus Rodriguez Aguilar

BBVA/Sabadell: Deal Uncertainty Grows After Sabadell's Results

Banco de Sabadell's strong Q2 performance and strategic progress may deter BBVA's takeover bid without improved terms. Trading at 0.89x P/TBV and...

Jesus Rodriguez Aguilar

BBVA Files Hostile Offer: Conditions, Defences and Probabilities

BBVA submits authorization request for all-stock offer for Sabadell, with deal expected to close in 6-8 months. Gross spread indicates 52%...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

BBVA/Sabadell: Onto Phase 2

The CNMC extended the BBVA-Sabadell merger review to Phase 2, adding three months to assess potential impacts and allow further stakeholder input.

Jesus Rodriguez Aguilar

BBVA/Sabadell: Update on Conditions, Positive Gross Spread

The European Commission has until November 26 to approve or object to BBVA’s acquisition of Sabadell. If no objections are raised, the deal will be...

Jesus Rodriguez Aguilar

BBVA/Sabadell: Adjustment of Exchange Equation

BBVA has updated its hostile takeover offer to Banco Sabadell shareholders, proposing a cash payment of €0.29 and modifying the exchange ratio to 1...

Jesus Rodriguez Aguilar

BBVA/Sabadell: Deal Uncertainty Grows After Sabadell's Results

​Banco de Sabadell's strong Q2 performance and strategic progress may deter BBVA's takeover bid without improved terms. Trading at 0.89x P/TBV and...

Jesus Rodriguez Aguilar

BBVA Files Hostile Offer: Conditions, Defences and Probabilities

​BBVA submits authorization request for all-stock offer for Sabadell, with deal expected to close in 6-8 months. Gross spread indicates 52%...

Jesus Rodriguez Aguilar

Banco de Sabadell's strong Q2 performance and strategic progress may deter BBVA's takeover bid without improved terms. Trading at 0.89x P/TBV and...

BBVA submits authorization request for all-stock offer for Sabadell, with deal expected to close in 6-8 months. Gross spread indicates 52%...