THE National Markets and Competition Commission –CNMC– will send today the hostile takeover launched by BBVA about Bank Sabadell has Phase II. As you may have known OKDIARIOthe regulator considers that other interested parties must be taken into account, beyond the two entities, and that the case of banking concentration what is happening requires further study. The conclusions will arrive in March at the earliest and will require BBVA greater efforts if you want to perform the operation.
THE CNMC will probably communicate this decision at the close of the market, even if the sources consulted by this newspaper explain that it will be sent in phase II by the complexity of the operationand because it practically meets “all the conditions” to make it “a complex operation” due to its concentration.
So, even if it can be extended for another six months, what is normal according to the law itself is that the CNMC will rule in March definitively on the operation between the two entities.
Extending the deadline also makes it possible to require a series of conditions, called remedieshas BBVAif you wish to continue with the Hostile takeover. There are many occasions where, precisely because of the level of demand of those remediescertain acquisitions or mergers They are not moving forward. Just remember what happened during the last attempt to Iberia get your hands on Air Europe. Demands from Brussels prevented the purchase.
BBVA and Sabadell
“The passage of time not good for the transaction“. This is the phrase that different people have repeated on different occasions. BBVA executivesbecause the longer the operation extends, the more the market’s feeling about its viability deteriorates. What seemed like a movement showing signs of success is now moving in the opposite direction.
This is precisely the opinion they have today since Bank Sabadellwhere they started defense of BBVA assault arguing about “the value they could deliver to their shareholders alone” and ended up talking about BBVA as a “Mexican entity and not a European one”, given its dependence on Mexico in its balance sheet.
It is also true that last week was particularly hard for the price of BBVA, down almost 7% the day after the US elections, and leaving more than 5% from that day to today. Donald Trump’s victory does not bode well for the banking sector in Mexicoand BBVA suffered as a result, as Sabadell had somehow predicted.
According to his National Markets and Competition Commission“the operation could lead to complications in certain markets”, referring in particular to the east of the country. Spainand its viability depends on banking concentration which does not affect the end customer.
The March decision
In this sense, the proper CNMC will deliver its verdict in this famous Phase II, during which it will deal with public tender offer from BBVA on Sabadell from the customer’s point of view Spainamong others. And although it would be strange if the verdict was negative, it would not be strange either if the claims erased the profitability of the operation.
THE Commissionaccording to various sources of this newspaper, will ask a high price for BBVA. This will force sell the oldest part of Sabadell’s activities in the east of the countryand will likely include other conditions. Something that shareholders will examine closely when they accept or not the operation.
THE National Securities Market Commission –CNMV-, even if he has already repeated several times that he would wait for the decision of the Competition before rendering a verdict. In this way, in addition, shareholders do not have to pronounce blindlythat is to say without knowing the requests of the CNMC.
