Carlos Torres has had to live on the front line of the two largest hostile takeovers in Spain so far this century. And he has done it both in defense and attack. He was Director of Strategy at Endesa in 2005, when Gas Natural (today Naturgy) made its offer, and now he is president of BBVA, which has just launched its bid for Sabadell after the Catalan bank’s rejection of its friendly merger proposal. Two antagonistic positions in which, despite experience, some errors seem to be repeated.
Born in February 1966 in Salamanca, Torres lived in several cities, following the professional destinies of his father, a Treasury official. He studied at the Massachusetts Institute of Technology (MIT) and began his business career at the consulting firm McKinsey. All this while he completed his law degree at UNED.
It was shortly after, at the end of the nineties, with the privatization of Endesa, when the McKenseys landed in the electricity company. Torres’ arrival was somewhat later, in 2002, at the hands of Manuel Pizarro, who had been appointed president that year and who had to form his own team without knowing the house in depth. He placed Torres as head of strategy, a key position in the company’s command bridge, the same one that decided to stubbornly defend itself against the Gas Natural takeover bid.
Anyone who has worked with Torres highlights the “professional advantage” with which he arrived at Endesa. At just 36 years old, he provided a profile that was unusual at the time, as a highly prepared manager, trained abroad and with knowledge of the latest management trends. Analytical, fast and decisive, he spoke the language of the markets and was far from the culture that was predominant at Endesa at that time.
His character, they say from his former surroundings, is that of a cordial person, very firm in his ideas and, above all, self-confident, to the point of bordering on excess. She also has a calm character, not prone to histrionics or authoritarian tone. She uses irony to make things less serious.
During the Gas Natural takeover he was part of the team that led the opposition. Pizarro said a phrase that sounds current today: “99.9% of the company, to put the stock through the roof; the rest, to prevent the takeover.” And Torres had to be part of that rest. While the president of Endesa stormed out in front of the media and brandished a copy of the Constitution – they rushed to buy it at the BOE headquarters – Torres shared the rejection, but opted for a profitable operation for the shareholders. It is one of the mantras he repeats now and a feature of his professional training.
At Endesa there were no divisions, but there were two profiles: those of financial orthodoxy and those who, like Pizarro, began a political crusade. Among the first were the corporate financial director, José Luis Palomo, and Torres himself. The orthodox saw Pizarro’s efforts and his message that Endesa’s stock was worth close to double as exaggerated. Ironically, the operation went beyond all orthodoxy: Enel and Acciona paid 41.3 euros per title, compared to the 21.3 offered by Gas Natural.
Once the management of Endesa was replaced, Torres fell to Isofoton, from which he was able to escape when he detected the first accounting deficiencies. Then came BBVA’s time. The friendship between two stockbrokers, Pizarro and Francisco González, then president of the bank, allowed him to be incorporated as head of strategy. He arrived at BBVA along with his number two at Endesa, Javier Rodríguez Soler, who continues to occupy key positions at the bank.
The question is whether Torres, despite his experience in the two major takeover bids, has erred in repeating some of the mistakes made by Gas Natural. One of them is to offer a payment in shares instead of cash – 65.5% of Gas Natural’s offer for Endesa was like this, compared to 34.5% in cash. Another is to go for a very profitable company in a position to look for alternatives. The third consists of mismeasuring political times. Time will decide.
