BBVA is willing to assume the possible reputational risk if the takeover bid for Sabadell does not go ahead

MADRID, 9 May. (EUROPA PRESS) -

The president of BBVA, Carlos Torres, stated this Thursday that he will be "very proud" of having attempted the merger with Banco Sabadell, in case the Public Acquisition Offer (OPA) is not approved by the shareholders of the Catalan entity, and that his entity, his team and himself are willing to assume the possible reputational risk.

"If Sabadell's shareholders finally decide that this is not the way to go, we will also be very proud of having tried and there will be no regrets at all, we will have no doubts about what we have done," said the president of BBVA in a press conference to explain the terms of the hostile takeover bid that it has presented to the market.

He has defended that after the Sabadell board of directors rejected the "friendly" offer it made last week, the "easy" position would have been to abandon the project. "But it is not what they pay us for. We believe that we have the responsibility to defend the interests of our shareholders and, in that sense, we believe that what the situation demands in the face of an operation that has enormous appeal for everyone is to present it to the shareholders of the Bank. Sabadell for them to decide," he assured.

In the event that these shareholders decide that the operation is of no interest to them, BBVA indicates that if it generates reputational damage, "it is welcome," in reference to the fact that it believes that the bank trusts in doing the right thing.

"We are willing, this team, this council, of course this president, to assume the reputational risk, if it occurs, for having attempted an operation that makes a lot of sense. No one is guaranteed success, but the easy way is not to try it." ", he continued.

Asked at the press conference about the decision not to include a cash payment to shareholders, an option that analysts had considered, Torres defended that the proposed share exchange is an "extraordinarily attractive" offer, highlighting the premiums it entails. compared to April 29 - the date before BBVA's intentions were known - 30% and 50% compared to mid-April, when the entity began to explore the operation.

However, he added that he foresees a "big" journey for BBVA shares, as he has been expressing to the market in the results presentations. "For this year we estimate that net profit will grow by double digits, that is, more than 10%, compared to the 2023 results of 8,019 million euros. And with subsequent growth in 2025," he explained.

He has also justified the decision in that the takeover bid will take a few months to take place, a maximum of eight months; Subsequently, the offer acceptance period would open, which indicates that there will be time to "demonstrate" the evolution of the business to the market.

Another reason is the "very important" liquidity that BBVA shares have, three or four times that of Sabadell shares. "To a large extent it is the same as receiving cash for retailers who do not have large positions and would like to undo them," Torres defended.

"It is a very attractive offer that, in addition, time will make it more attractive and that also has highly liquid components," he concluded in this regard.

On the other hand, the president of BBVA has recognized the possibility that other banks see the value of Banco Sabadell and may also be interested in submitting offers for the entity. However, he has indicated that this possibility would not mean that BBVA improves its offer for the Catalan entity, since "there is no longer any room."

"We have put our best offer on the table. It was very clear on Sunday and I only have to refer to Sunday's letter", in reference to a letter that Torres sent on May 5 to the president of Sabadell, Josep Oliu, where they expressed that they could not raise the proposal and that it was published this Wednesday.

Another issue that was addressed during the press conference was the possible rupture that could result from the merger of Sabadell's joint ventures. The CEO of BBVA, Onur Genç, has indicated that the impact of 30 basis points on the CET1 capital ratio - which translates into some 1,450 million euros for restructuring expenses - already includes a penalty for the changes. of owner of these joint ventures.

However, they cannot account for the impact of the ruptures as it involves information in contracts of which they are unaware. In addition, there is a business, Paycomet, that Sabadell wants to sell 80% of to Nexi, an operation that has not yet been closed and, therefore, the income that it will represent in Sabadell's income statement has not been recorded.

Onur Genç has stated, however, that BBVA considers the joint ventures that Sabadell has - in the pension, insurance, payments, asset management and custody business - with "flexibility". If the merger occurs, the bank will decide together with Sabadell's partners what to do with the signed agreements.