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.
The takeover bid announced by BBVA on 9 May is a bid addressed directly to Banco Sabadell shareholders to acquire their shares, offering in exchange newly issued BBVA shares based on a certain exchange equation (1 BBVA share for every 4.83 Banco Sabadell shares).
The takeover bid is considered hostile because it has been submitted by BBVA without prior agreement with Banco Sabadell’s Board of Directors.
The takeover bid is a long process that could take many months since it is subject to BBVA obtaining a series of regulatory authorisations.
Once the CNMV approves the takeover bid, the so-called “acceptance period for the takeover bid” would begin.
It is not yet known when this will take place. However, due to the complexity of the regulatory procedures, it is estimated that it could be at the end of 2024 or even in 2025.
It would then be when the Board of Directors of Banco Sabadell would publish the public and detailed report in relation to the takeover bid, in which it would communicate its assessment of it.
At this time, shareholders do not have to make any decisions regarding the takeover bid, as the takeover bid process may take until the end of 2024, or even 2025. This will be when:
i. The acceptance period for the takeover bid will be open
ii. Banco Sabadell’s Board of Directors will issue a public and detailed report regarding the takeover bid
iii. The shareholder will be able to decide whether or not to accept the takeover bid.
Prior to the announcement of the takeover bid, the Board of Directors of Banco Sabadell rejected merger proposal received from BBVA on 30 April (under the same economic conditions later set out in the takeover bid).
The Board of Directors of Banco Sabadell rejected the proposal, as it significantly undervalued Banco Sabadell’s project and its growth prospects as an independent institution. The Board of Directors expressed its full confidence in Banco Sabadell’s growth strategy and financial goals, believing that Banco Sabadell’s strategy as an independent institution would generate greater value for its shareholders. It also indicated that the significant fall and volatility of BBVA’s share price in the days prior to the rejection of the proposal led to additional uncertainty about the value of the proposal.
Based on a detailed analysis of the proposal, the Board of Directors concluded that the offer was not in the interest of Banco Sabadell or its shareholders, and consequently rejected BBVA’s proposal.
The Board of Directors added that it believed its decision was in line with the interests of Banco Sabadell’s clients and employees.
