BBVA announces the submission of a merger proposal to Banco Sabadell
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‘Hostile’ Takeover Bid
Key Elements on the Takeover Bid
‘Hostile’ Takeover Bid
A takeover bid is a formal process by which an investor makes an offer directly to the shareholders of a listed company to acquire their shares.
On 9 May, Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) announced the submission of a takeover bid for Banco Sabadell, offering Banco Sabadell shareholders BBVA shares based on the following exchange ratio: 1 BBVA share for every 4.83 Banco Sabadell shares.
In accordance with the provisions of the previous announcement of the takeover bid and as a result of the payment of interim dividends on account of 2024 results made by both Banco Sabadell and BBVA on October 1 and 10, 2024, respectively, BBVA announced on October 1 the adjustment of the exchange ratio that as of October 10, 2024 will become 1 share of BBVA + €0.29 in cash for every 5.0196 Banco Sabadell shares.
The takeover bid launched by BBVA is considered hostile because it was submitted without prior agreement with Banco Sabadell’s board of directors.
BBVA submitted a merger proposal which Banco Sabadell’s Board of Directors rejected
The rejected proposal had the same economic conditions as the takeover bid.
Shareholders do not have to make any decisions regarding the takeover bid at this time
At the appropriate time, Banco Sabadell shareholders will get the opportunity to decide where or not to accept the takeover bid.
The information needed to make a decision is not yet available
Banco Sabadell shareholders need to receive much more information in order to make a proper decision.
Shareholder Remuneration Commitment 2024-2025
As a demonstration of confidence in Banco Sabadell’s excellent prospects, the Banco Sabadell Board of Directors has increased the commitment to shareholder remuneration, estimated to reach €2.9 billion1 on account of financial years 2024 and 2025, equivalent to 53 euro cents per share.
Dividend 2024
The Banco Sabadell’s Board of Directors has approved distributing 60% of the profits of financial year 2024, fulfilling to its internal policy of distributing between 40% and 60% of the profit (pay-out).
The first interim cash dividend was paid on 1 October.
- It amounted to 8 euro cents per share.
- It involved a total distribution of €429 million (15% of the total committed under 2024-25).
(1) Commitment to distribute to shareholders, on a recurring basis, any excess capital above the 13% Basel IV pro forma CET1 ratio. It is estimated that the excess capital generated in 2024 and 2025, together with the recurring dividends for this period, will amount to €2.9 billion, subject to successful fulfilment of the current business plan. Part of the expected remuneration could be subject to the approval of supervisory authority.
Chronology and information published on CNMV
CNMV accepts for processing the authorisation request for the takeover bid, beginning the regulatory authorisation process
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Other relevant milestones
BBVA announces the adjustment of the exchange ratio of the takeover bid because of the payment of dividends by Banco Sabadell and BBVA
See the complete overview of relevant information communications
Communications to shareholders
Letter from chairman to shareholders
Information on the announcement by the CNMC to extend its analysis to phase 2, and information around other pending authorisations.
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Letter from the chairman to shareholders
Information on the payment, on 1 October, of a dividend of 8 euro cents on account of 2024 results.
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Letter from the chairman to shareholders
Information about the expected decision of non-opposition to the takeover bid from ECB based on strictly solvency criteria, and details on next steps of the transaction.
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Letter from the chairman to shareholders
Information on the results for the second quarter of 2024 and the increase in shareholder remuneration commitment of Banco Sabadell.
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Letter from the chairman to shareholders
Information on the estimated timeline of the takeover bid process and the identification of information needed by Banco Sabadell shareholders to make a decision.
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Letter from the chairman to shareholders
Information on the progress of the takeover bid process and the prospects Banco Sabadell’s Board of Directors has for the coming quarters.
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Highlighted appearances
Message from the chairman and CEO about the results for the second quarter of 2024 and the increase in shareholder remuneration
Message from the chairman and CEO of Banco Sabadell regarding the decision to reject BBVA’s merger proposal prior to the takeover bid
Speech by César González-Bueno at the 31st Deloitte-ABC Financial Sector Meeting: “A longer takeover bid process means that there is more time to bring all the information to the table”
Participation of César González-Bueno at Matins ESADE: “when the Board analysed the proposal, it said that the price was clearly insufficient; since then, it has been reduced. So, if it was insufficient before, now it is even more. The takeover bid is a very complex transaction which I believe is not likely to happen”
Speech of César González-Bueno at the 15th Expansión – KPMG Financial Sector Meeting: “we believe that this operation does not make any sense”
29th Annual Financials CEO Conference Audio of Bank of America “Banco Sabadell will pay its shareholders around 30% of its stock market value in 18 months and is committed to providing them with attractive, recurring long-term remuneration”
Video of CEO’s speech at the El Economista Banking Forum: “The takeover bid is very unlikely to succeed. In my opinion, it does not make sense”.
CEO & CFO appearance at Goldman Sachs Conference: “Banco Sabadell is committed to shareholder remuneration, supported by excellent prospects for improving profitability”
CEO appearance at IESE Conference: “Everything began, without prior negotiations, with a letter setting out the merger proposal”
Interview with César González – Bueno on CNBC: “It’s about value creation and that is what we are all for”
Interview with César González-Bueno on A3: ‘The survival of a major bank is at stake. One out of every two SMEs in Spain is a client of Banco Sabadell’
Interview with the CEO of Banco Sabadell on TV3: ‘If we continue to work hard and continue to achieve good results, the value of Banco Sabadell will be recognised’
César González-Bueno on Onda Cero: ‘Before there was any talk about this transaction, Banco Sabadell shares had already risen by 60% this year’
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César González-Bueno on COPE: ‘For now, shareholders do not need to do anything. Their time to decide will probably come next year’
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César González-Bueno on Catalunya Radio: ‘Banco Sabadell is a very important player because SMEs need multiple banks and our institution has a strong connection with them’
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César González-Bueno on Cadena SER: ‘Banco Sabadell disappearing would not be good for competition in Spain, especially in the SME sector’
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Frequently Asked Questions
- What is a takeover bid?
- Why is the takeover bid submitted by BBVA is considered ‘hostile’?
- What is the duration of the takeover bid process?
- When will Banco Sabadell’s shareholders be able to decide whether or not to accept the takeover bid?
- Why did Banco Sabadell’s Board of Directors reject the merger proposal submitted by BBVA prior to the takeover bid?
