“I have bad news for investment banking, because we don't see much M&A activity.” César González-Bueno, CEO of Banco Sabadell, responded with ease and confidence to the question posed by a representative of JP Morgan at the conference with analysts and investors held just a week ago, on the morning of April 25. “We really like our current perimeter,” insisted a manager whose words showed a certain pride in the ability to recover…

To continue reading this Cinco Días article you need a Premium subscription to EL PAÍS

“I have bad news for investment banking, because we don't see much M&A activity.” César González-Bueno, CEO of Banco Sabadell, responded with ease and confidence to the question posed by a representative of JP Morgan at the conference with analysts and investors held just a week ago, on the morning of April 25. “We really like our current perimeter,” insisted a manager whose words showed a certain pride in the recovery capacity of his entity when he was directly asked if he expected any corporate movement in European and, particularly, Spanish banking.

In fact, the analyst who raised the question (belonging to the same investment bank that regularly works with BBVA, and that has advised it in its assault on Sabadell) spoke of a “very strong” position of the Catalan entity, as if The one that had an operation in mind was the entity led by González-Bueno (a few weeks ago the object of speculation was Unicaja). The reality has emerged with the opposite result: Banco Sabadell does not go shopping, but rather they want to buy it, in a path of banking consolidation in Spain that continues to compress. BBVA tries again to take advantage of Sabadell in an operation that, despite the failure of 2020, never disappeared from its plans. Of course, these four years change the equation: Sabadell is four times more expensive and BBVA is worth three times as much.

Things have changed so much in this four-year period that neither in the market nor in Banco Sabadell was a bet of this magnitude suspected. During Tuesday afternoon the financial groups repeated the same question: Why now? The letter sent by BBVA to the board of directors of Sabadell this Wednesday has many derivatives and justifications, but it does not clarify anything about the chosen moment.

A strange and peculiar moment. Because it happened one morning on the eve of a long festive weekend in the Community of Madrid. Sabadell shares marked their third consecutive rise after the presentation of results where JP Morgan asked about corporate operations: up to 15% in three days. On Tuesday, Sabadell marked modest increases, around 1.5% when at 1:16 p.m. the journalist from SkyNews Mark Kleinman published the BBVA proposal on The agency Bloombergwhose terminals are on the negotiation tables of brokers from all over the world, replied the news a minute later.

The stock skyrocketed on the stock market in a matter of seconds. Between 1:15 p.m. and 1:20 p.m. Sabadell rose 5.5%. In that period, in addition, 10 million shares were traded, more than a third of those that moved in the entire session on Monday, probably due to automatic programs that scan social networks for clues. However, the operation was denied by Sabadell (as Kleinman himself indicated), and the market reacted with a certain disdain to an already known song. At 1:40 p.m. the stock was cheaper than before the original tweet.

Seven minutes later the bomb went off in the form of a communication from BBVA to the CNMV confirming the news: the proposal had been transferred to Josep Oliu, president of the board of directors of Sabadell, and BBVA already had advisors working on the operation. The market, obviously, began to price the possible purchase, even in the absence of key details. At 2:23 p.m. the statement from the Catalan bank is dated, brief (as usual), but where it did specify the moment in which it received the proposal: 1:43 p.m., just 40 minutes after the news appeared in the British press.

Sabadell's stock rose sharply again while BBVA ended up losing 6.65%. The translation of all this stock market swing? BBVA was going after Sabadell and had to be serious. “They have to go all out because they cannot afford another setback,” various financial sources transmit, viewing the story from the perspective of the accomplished facts. Apparently, BBVA had the work advanced. 24 hours after confessing his intentions and in the middle of Labor Day, one of the six days a year in which the Spanish Stock Exchange remains closed, he made public the letter sent to the board of directors of Sabadell with all the details of his ordeal.

Back on Tuesday afternoon, the board of directors of Banco Sabadell met urgently, although only for information purposes. Sources close to the leadership of the group of Catalan origin maintain that the president, Josep Oliu, expected – or feared – a movement of this type. Others defend that to talk about the degree of knowledge of the operation, the operation must be classified as “informed” rather than “consensual.” A third source admits that it is “an aggressive operation, not a hostile one,” while other offices point out, on the contrary, that there were previous approaches between both entities, where some of the conditions expressed in the document were even discussed. letter. Nuances for an operation that, as all sources point out, not even its promoters expected to jump to the forefront of news so soon. From the Catalan bank they maintain silence.

The leak of the news has blown the deadlines: the usual thing in these operations is that a formal act of delivery of the proposal document takes place and, once it is known, both entities announce it, as happened in 2020. This time it has not been So. In any case, “three and a half years ago Josep Oliu put an end to the negotiations to merge BBVA and Sabadell, and if he was able to do it it was because he had participated in a friendly operation,” they add from those around the Catalan business community.

The entity's idea at this time is to give itself a few days of reflection before responding to an offer that puts pressure on the market. To do this, a new council must be convened, which is expected tomorrow or next Monday. At the expense, of course, of a market that is not in the habit of waiting for events. After the astonishment, it is time to step back and reflect: the ball is in the roof of the Sant Cugat headquarters.

“Shareholders already know the details of a proposal that gives them a premium on a share price that has appreciated significantly in recent years,” says another source who closely follows corporate operations. Thus, BBVA has killed two birds with one stone: on the one hand, it is transparent with its proposal and avoids speculation. And, on the other hand, it puts pressure on the Sabadell council due to the interest it may arouse among investors in the Vallesan entity. “It is an offer, at the very least, interesting. If they reject it, they will have to explain it very well to investors,” adds another source familiar with the preparation of the offer by the group of Basque origin.

What at first seemed like a half-baked puzzle, which caught locals (BBVA) and strangers (Banco Sabadell) on the wrong foot, now seems to fit in almost all points. “It makes all the sense in the world,” says another source in the sector. Although it is true that the context does not seem ideal to acquire another entity, as the financial sector is on the crest of the wave after the abrupt rate increase set by the European Central Bank (ECB) between July 2022 and September 2023, sources familiar with BBVA's internal work consider that the window of purchase opportunity could close in the coming months.

Follow all the information Five days in Facebook, x and Linkedinor in our newsletter Five Day Agenda

Newsletters

Sign up to receive exclusive economic information and the financial news most relevant to you

Sign up!

You May Also Like

More From Author

+ There are no comments

Add yours