As on big occasions, the president of BBVA, Carlos Torres, and the bank’s CEO, Onur Genç, went to great lengths yesterday to defend the unsolicited takeover of almost 12.4 billion euros in shares for Sabadell. First thing in the morning they held a meeting with analysts and, at noon, a press conference lasting more than an hour and a half to answer journalists’ questions.
Torres announced that some Sabadell shareholders are interested in selling, he trusted that the Government will end up accepting the movement, he assured that there will be no “traumatic” departures of workers and he did not rule out the appearance of competing offers. If a new bidder emerges, the bank does not plan to increase the exchange offered or pay in cash.
“I would congratulate the shareholders of Sabadell” for the good performance of the bank in recent years and for the offer that BBVA has just put on the table, he stated to praise an “extraordinarily attractive” proposal, even without “component cash”.
The proposal “can give Sabadell shareholders figures higher” than the 2.4 billion euros of excess capital that the Catalan bank plans to distribute in dividends, he assured.
He also defended the bank’s behavior in recent weeks, since it had a first “in-person” meeting with the president of Sabadell, Josep Oliu, in mid-April, to discuss a possible integration. At that moment he conveyed “BBVA’s interest in a merger” and they agreed to “deliver the proposal on April 30.” However, “a leak prevented the meeting from taking place and precipitated the events,” he said.
In any case, the president of BBVA maintains that “at no time has there been an unfriendly or hostile character.” What happens is that the approach “is now different” and has gone from proposing an operation to the Sabadell board to doing so to the shareholders.
The takeover bid, he said, “is not a plan B” nor is there “room for improvement.” “The easy thing would have been to abandon the project after Sabadell’s rejection, but that is not what they pay us for, so we have the responsibility of defending the shareholders and presenting the proposal to those of Sabadell so that they can decide.”
One of the most significant messages has to do with previous contacts with some Sabadell shareholders. “There have been investors who have contacted us for an offer like the one we presented” and some of them are “relevant,” he stated. In the conference with analysts early in the morning, he had assured: “We are in contact with Sabadell shareholders to find out their impression” and “we have received expressions of interest.”
Another element of concern has to do with the Government’s rejection of the merger. “The bank respects this opinion” and “I trust that the Government will appreciate the benefits of the operation,” which “will support the economy much more,” Torres responded when asked about this matter.
Faced with reluctance due to less competition in the sector, he assured that “in all market share metrics the resulting group would be below CaixaBank.” He also said that “credit to businesses will not be restricted.”
Another of the BBVA president’s arguments was that Europe needs to gain scale in strategic sectors. Not only did he appear confident in obtaining approval from authorities such as the ECB, the CNMV or the CNMC, but he also hinted that some of them support this type of movement. “The ECB likes consolidation and larger entities, with cross-border operations,” he said.
Torres acknowledged that “there may be some staff departures in the short term,” but BBVA has “a lot of experience” in doing so “with non-traumatic measures and with programs that usually have enormous acceptance by the workforce.”
