This Tuesday, after the market closed, BBVA announced the adjustment of the exchange proposed in the public purchase offer for the shareholders of Sabadell after the two entities formalized the amounts of the next BBVA dividend and that that Sabadell has just paid. Thus, the exchange ratio, which until now was 4.83 Sabadell shares for one BBVA, becomes 5.0195 Basque titles for each Catalan title.
This new equation takes into account that Sabadell will soon make a payment of 8 cents per share and that BBVA will do the same with a dividend of 0.29 euros after increasing its remuneration by 81% compared to the same payment last year and thus guaranteeing the largest disbursement in its historywith 1.7 billion. This dividend will be distributed on October 10, with the 7th being the last day to acquire the right to cash it.
Beyond that, what interests the investor is whether this changes the premium he would obtain in the event of a successful takeover bid. And the answer is no. The current difference amounts to 3.3% depending on the share price of the two banks, to which must be added the dividend of 0.29 euros that BBVA now promises to Sabadell shareholders in cash but which will be discounted from the share price the coming week. The only difference is therefore that they will receive part of the consideration in cash and not all in shares, which was a request from Barcelona in recent months.
This premium of 3.3% remains lower than the average premium maintained on the market since the launch of the public purchase offer on May 1, i.e. 5.7%. Therefore, one could say that at present the attraction of going there is not the most important. “The adjustment made in the exchange maintains the economic conditions of the initial offer but includes a small cash payment equivalent to the dividend that BBVA will pay next week in a move which, we understand, aims to obtain acceptance of the shareholders of Sabadell and to ensure greater success of the operation”, they explain from Renta 4.
“BBVA is thus trying to convince the minority shareholders of Sabadell to accept the exchange equation, but the total payment seems insufficient to us and our reasoning is as follows: the new exchange equation implies valuing the shares of Sabadell at 1 .85 euro Therefore, the new proposal does not improve the total offer”, we emphasize at Bankinter. “It should be remembered that BBVA’s initial proposal valued Sabadell at 2.25 euros, but since then the price of BBVA has fallen by more than 14%, so the current valuation is below the target prices”, continue- they. “We believe it is highly likely that Sabadell’s management team will improve advice results for 2024 and 2025 and the expected remuneration of shareholders in the presentation of the third quarter results”, they conclude.
Potential of more than 20%
The open operation still has a long way to go until all stakeholders agree and finally embark on seeking acceptance from Sabadell shareholders. As this happens, analysts give both companies potential of more than 20% from their current levels at a time when rates are still higher than their averages of the last two decades.
However, analytical houses are more inclined to recommend investors to enter through Sabadell, to which they give purchasing advice in relation to the maintenance that BBVA receives.
