As on major occasions, the president of BBVA, Carlos Torres, and the bank’s CEO, Onur Genç, went all out yesterday to defend the unsolicited takeover of almost 12.4 billion euros in shares of Banco Sabadell . Early 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 advanced that some shareholders of Banco Sabadell are interested in selling, he trusted that the central government will eventually accept the move, 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 raise the offered exchange or pay in cash.
“I would like to 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 said to praise an “extraordinarily attractive” proposal, even without “cash component”.
The proposal “can give the shareholders of Sabadell 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 in mid-April he had a first “face-to-face” meeting with the president of Sabadell, Josep Oliu, to discuss a possible integration. At that time he conveyed to him “BBVA’s interest in a merger” and they agreed that “I would give him the proposal on April 30”. However, “a leak prevented the meeting from taking place and precipitated the events”, he pointed out.
In any case, the president of BBVA affirms that “at no time was there an unfriendly or hostile character”. What is happening is that the approach “is now different” and has gone from proposing an operation to the Sabadell council to proposing it to the shareholders.
The OPA, he said, “is not a plan B” nor is there “room for improvement”. “The easiest thing would have been to abandon the project after Sabadell’s rejection, but that’s not what we’re paid for, so we have the responsibility to defend the shareholders and present the proposal to Sabadell for them to 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 are presenting” and some of them are “relevant”, he said. At 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 an expression of interest”.
Another element of concern has to do with the central 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”, answered Torres on 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 companies will not be restricted”.
Another of the BBVA president’s arguments was that Europe needs to gain scale in strategic sectors. Not only was he confident of obtaining approval from authorities such as the ECB, the CNMV or the CNMC, but he also hinted that some endorse this type of move. “The ECB likes consolidation and larger entities, with cross-border operations,” he pointed out.
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”.
