Alantra Sharesthe research arm of the investment bank, recommended BBVA withdraw the buyout offer (OPA) about Bank Sabadell in the event that the National Markets and Competition Commission (CNMC) put terms or request commitments that affect the profitability of the investment. According to him, in this scenario, it would be impossible to achieve the synergies of 850 million estimated by BBVA.
“The ambitions of mergers “They should not come at the expense of shareholder value and we would consider it positive for BBVA to withdraw if the CNMC creates obstacles,” said the analyst at Francisco Riquel.
Alantra considers that the conditions of BBVA’s public takeover offer have deteriorated for Banco Sabadell shareholders. When he announced the offer, with the 30% bonusSabadell once assessed its book value. Taking into account the uneven evolution of the two values on the stock market (BBVA falling and Sabadell increasing), the terms of the operation now value Sabadell at 0.9 times its book value.
“We hope that the the premium becomes negative if the market appreciates more value in Sabadell independentforcing BBVA to improve its offer or withdraw”, estimates the analyst. As OKDIARIO reports today, the main Spanish bankers believe that the operation has run out of steam and doubt its completion.
In this sense, Alantra Equities affirms that it is not aware of any hostile offer having prospered with the prices initially proposed.
Thus, for BBVA to be able to maintain the initial terms of the offer, by valuing Sabadell immediately at its book value, it would have to increase supply by 15%, the equivalent of an additional 1.8 billion euros. Although for this to maintain the 20% ROI that BBVA aspires to, it would need to reach certain more aggressive synergiesreducing the cost base of the Catalan bank by 50%.
“In any case, we believe that BBVA will not be able to increase its synergy targets if the CNMC imposes strict conditions (any forced sale of assets would result in lower revenues or negative synergies) or if there Government ultimately imposes a merger veto“, warned Alantra in his report.
Looking to the future, and beyond the takeover bid, Alantra considers that the benefits of BBVA will peak in 2024, they cannot therefore be maintained in 2025 or 2026.
The analysis house published this Friday a new report on BBVA in which it places the indicative price from BBVA at 11.25 euros. While this implies a 13% upside potential from Thursday’s closing prices, the new price target is 8% lower than Alantra previously indicated due to uncertainty surrounding the closing price. Mexico and on the public purchase offer.
