The BBVA has received on Thursday night a letter from the US Stock Exchange regulator in which it authorizes, as a result of the launched on Sabadell, control between 30% and 50% of the Catalan entity. This would be to reduce the success threshold of the offer, at a time when Sabadell’s titles quote almost 10% above the BBVA bid, and complicate that the OPA is successful.
The document sent by the SC points to the OPA brochure contemplates that the BBVA reducing the acceptance threshold. He also points out that the entity chaired by Carlos Torres will only make this decision if he achieves at least 30% of the capital of Sabadell. It also admits that, in this case, and
“The brochure will reveal that the BBVA can renounce the minimum acceptance condition, will describe the procedure to renounce the minimum acceptance condition in accordance with Spanish legislation and practice, and analyze in detail the possible impact of this resignation,” says the letter. It also indicates that the brochure will alert shareholders not to sell their actions to the BBVA if they consider that the reduction of that minimum acceptance threshold can affect their intention to accept the OPA.
That possibility that the BBVA lower the minimum threshold to consider that the operation on Sabadell is successful for months rumored in the market. The Bank CEO, Onur Genç, subtracted this movement possibilities during the last press conference for the presentation of results. Among the reasons is the obligation to launch that second EPA in cash, much more expensive for Torres, and corporate governance problems that would open to have 30% of a bank with a board of directors against the counter.
Genç also denied that the bank would improve the current bid, currently in an action of the BBVA and 0.7 cents in delayed dividends per 5.5483 Titles of Sabadell, and this is the movement that most investors expect for the coming weeks.
The SEC letter also authorizes the to lower the price of the OPA in case the Sabadell pays a dividend during the acceptance period. Likewise, the US Stock Exchange regulator allows an exception in terms of deadlines and that the final brochure in the Spanish market is published before, and the acceptance period begins, that the final document reaches the SEC itself.
Deadlines
The OPA brochure, in which according to the communication to the SEC, the process will be detailed for that eventual reduction of the minimum acceptance, is currently under study by the National Securities Market Commission (CNMV). The BBVA, as stated at the end of July, referred to the CNMV its latest version of the brochure after the two shareholders’ boards that Sabadell celebrated on August 6, in which. The new document also incorporated the accounts of the first semester of both entities and when sending it during the month of August, the BBVA prevented the acceptance deadline from coinciding with an un -stock monthly month.
The sources consulted indicate that the forecasts go through the brochure is approved during the next week, although the calendar is subject to the CNMV need more time to study the information sent and postponed. The regulator’s approval requires the meeting of the Council of this body, which is usually summoned on Thursday, although it can set an extraordinary summit in the previous days only to pronounce on the OPA to Sabadell.
Once this occurs, the acceptance period will begin, in which Sabadell’s shareholders must decide whether they sell their titles to BBVA or bet because the bank remains alone. This period will be between 30 and 70 days, to be agreed by the BBVA, although market sources are inclined to get closer to the legal minimum. This means that the resolution of the OPA is delayed until mid -October.
The BBVA can improve the offer up to three days before this period expires and up to five days before competing offers could appear. Ten days after the acceptance period begins, it will be the moment in which the Board of Directors of Sabadell pronounces on the offer. While it is not a secret to anyone the rejection of the maximum organ of this bank, a report in which it justifies it must send to the regulator.
An eventual improvement in the price of the OPA is the key issue that all investors mean. While both Torres and Genç have reiterated that they do not plan to improve the bid, the market maintains the pressure to finally do so. This is demonstrated by the fact that Sabadell Cite above the offer. Currently, BBVA offers to pay, according to Thursday’s stock market closure prices, 2.97 euros per share, while the titles of the Catalan bank quote 3.25 euros. This means that the supply premium is negative in 9%.
This divergence complicates the success of the OPA, so that investors give Sabadell a value higher than the BBVA, as long as they can sell their securities in the stock market and obtain a greater price than if they accept the exchange offer of the Basque Bank. The negative premium became superior, of 15%, but the presentation by surprise of the BBVA strategic plan (not counting the acquisition of Sabadell) and the doubts that he could withdraw the OPA after the Board of the Sabadell approved the sale of its British subsidiary reduced this negative cousin considerably. In recent weeks, in any case, it has increased again.
