European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>The BBVA-Sabadell takeover deal has been elevated to the Council of Ministers for review, making political risk central despite both EU and CNMC's (antitrust) clearance.</li>
<li>Spanish government’s minority status makes it vulnerable to Catalan pressure opposing the deal.</li>
<li>Gross spread of -6.2% signals market skepticism or expectation of a sweetened offer.</li>
</ul>


The BBVA-Sabadell takeover deal has been elevated to the Council of Ministers for review, making political risk central despite both EU and CNMC's (antitrust) clearance.
Spanish government’s minority status makes it vulnerable to Catalan pressure opposing the deal.
Gross spread of -6.2% signals market skepticism or expectation of a sweetened offer.


Cabinet Clause: Political Hurdles in BBVA’s Takeover of Sabadell

<ul>
<li>BBVA’s hostile bid for Sabadell has cleared regulatory hurdles but faces political resistance (public consultation ending today 16 May), with final Government review pending by June 26.</li>
<li>A potential Sabadell–Abanca merger appears unlikely; Escotet would be the top shareholder (~33–36%) in such a deal, but Abanca has publicly denied interest.</li>
<li>The offer trades at a negative gross spread, suggesting market doubts or expectations of a sweetened bid — supporting a long SAB / short BBVA pair trade setup.</li>
</ul>


BBVA’s hostile bid for Sabadell has cleared regulatory hurdles but faces political resistance (public consultation ending today 16 May), with final Government review pending by June 26.
A potential Sabadell–Abanca merger appears unlikely; Escotet would be the top shareholder (~33–36%) in such a deal, but Abanca has publicly denied interest.
The offer trades at a negative gross spread, suggesting market doubts or expectations of a sweetened bid — supporting a long SAB / short BBVA pair trade setup.


Under Review: Banking on Politics in BBVA’s Bid for Sabadell

<ul>
<li>Revised Offer Terms: BBVA increased the cash payment to €0.13/Sabadell share (raising total cash outlay to €705 million), while adjusting the exchange ratio to 5.3456 Sabadell shares per BBVA share.</li>
<li>The deal requires CNMC, CNMV, and government approvals, with market skepticism evident as Sabadell's market price exceeds the offer value, signaling a low probability of success under current terms.</li>
<li>Financial Impact on BBVA: The increased cash component raises the estimated CET1 capital impact to 51bps, with potential further dilution if BBVA raises the cash payment to €0.20-€0.30 per share.</li>
</ul>


Revised Offer Terms: BBVA increased the cash payment to €0.13/Sabadell share (raising total cash outlay to €705 million), while adjusting the exchange ratio to 5.3456 Sabadell shares per BBVA share.
The deal requires CNMC, CNMV, and government approvals, with market skepticism evident as Sabadell's market price exceeds the offer value, signaling a low probability of success under current terms.
Financial Impact on BBVA: The increased cash component raises the estimated CET1 capital impact to 51bps, with potential further dilution if BBVA raises the cash payment to €0.20-€0.30 per share.


Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Our outlook remains bullish on MSCI ACWI. Discussed in latest Int’l Compass (1/9/2025) how viewed the pullback as buying opportunity and were watching for $116-$117 support to hold on ACWI-US.</li>
<li>$116 support held perfectly and we expect upside to continue following 1+ month bull flag breakouts, followed by successful retests of support, on ACWI-US and the S&amp;P 500.</li>
<li>We also upgraded Germany to overweight last week, with RS on the DAX breaking out from a 2-year base. U.S. (SPX) and Germany are our only two country overweights.</li>
</ul>


Our outlook remains bullish on MSCI ACWI. Discussed in latest Int’l Compass (1/9/2025) how viewed the pullback as buying opportunity and were watching for $116-$117 support to hold on ACWI-US.
$116 support held perfectly and we expect upside to continue following 1+ month bull flag breakouts, followed by successful retests of support, on ACWI-US and the S&amp;P 500.
We also upgraded Germany to overweight last week, with RS on the DAX breaking out from a 2-year base. U.S. (SPX) and Germany are our only two country overweights.


Remain Risk-On With Market Dynamics Improving; 6+ Month Base Breakouts for MSCI ACWI Ex-US and EAFE

<ul>
<li>Sabadell plans a €500 million share buyback to maintain stock value, reducing the attractiveness of BBVA’s exchange offer and increasing shareholder resistance to the takeover.</li>
<li>Regulatory scrutiny intensifies as BBVA-Sabadell would control 39.63% of Catalonian banking credit, raising competition concerns, particularly in SME lending and payment services.</li>
<li>The market expects BBVA to raise its offer by 10-20%, but BBVA’s CEO insists there is “no room” for improvement, making shareholder approval uncertain.</li>
</ul>


Sabadell plans a €500 million share buyback to maintain stock value, reducing the attractiveness of BBVA’s exchange offer and increasing shareholder resistance to the takeover.
Regulatory scrutiny intensifies as BBVA-Sabadell would control 39.63% of Catalonian banking credit, raising competition concerns, particularly in SME lending and payment services.
The market expects BBVA to raise its offer by 10-20%, but BBVA’s CEO insists there is “no room” for improvement, making shareholder approval uncertain.


Sabadell’s Dividend Strategy and the BBVA Takeover Bid

Spain

Banco Bilbao Vizcaya Argentaria, S.A. attracts deposits and offers retail, wholesale, and investment banking services. The Bank offers consumer and mortgage loans, private banking, asset management, insurance, mutual funds, and securities brokerage services. Banco Bilbao Vizcaya Argentaria operates in Europe, Latin America, United States, China, and Turkey.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Banco Bilbao Vizcaya Argentari (BBVA US)

Cabinet Clause: Political Hurdles in BBVA’s Takeover of Sabadell

BBVA’s bid for Sabadell faces a political wildcard as Spain’s minority government, reliant on Catalan votes, reviews the deal—injecting headline...

Jesus Rodriguez Aguilar

Under Review: Banking on Politics in BBVA’s Bid for Sabadell

BBVA’s hostile bid for Sabadell nears final approval amid political tension. Market doubts create a negative spread, offering a tactical long SAB /...

Jesus Rodriguez Aguilar

BBVA/Sabadell: Updated Terms

BBVA revises offer terms for Sabadell acquisition, increasing cash payment to €0.13/share and adjusting exchange ratio, facing market skepticism...

Jesus Rodriguez Aguilar

Remain Risk-On With Market Dynamics Improving; 6+ Month Base Breakouts for MSCI ACWI Ex-US and EAFE

Remain Risk-On With Market Dynamics Improving; 6+ Month Base Breakouts for MSCI $ACWI ex-US and $EAFE; U.S. Dollar $DXY and 10-Year Yields $TNX...

Vermilion Research

Sabadell’s Dividend Strategy and the BBVA Takeover Bid

Sabadell's dividend and share buyback plan complicates BBVA's takeover bid, facing regulatory concerns and uncertain shareholder approval.

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Cabinet Clause: Political Hurdles in BBVA’s Takeover of Sabadell

BBVA’s bid for Sabadell faces a political wildcard as Spain’s minority government, reliant on Catalan votes, reviews the deal—injecting headline...

Jesus Rodriguez Aguilar

Under Review: Banking on Politics in BBVA’s Bid for Sabadell

BBVA’s hostile bid for Sabadell nears final approval amid political tension. Market doubts create a negative spread, offering a tactical long SAB /...

Jesus Rodriguez Aguilar

BBVA/Sabadell: Updated Terms

​BBVA revises offer terms for Sabadell acquisition, increasing cash payment to €0.13/share and adjusting exchange ratio, facing market skepticism...

Jesus Rodriguez Aguilar

Remain Risk-On With Market Dynamics Improving; 6+ Month Base Breakouts for MSCI ACWI Ex-US and EAFE

Remain Risk-On With Market Dynamics Improving; 6+ Month Base Breakouts for MSCI $ACWI ex-US and $EAFE; U.S. Dollar $DXY and 10-Year Yields $TNX...

Vermilion Research

Sabadell’s Dividend Strategy and the BBVA Takeover Bid

​Sabadell's dividend and share buyback plan complicates BBVA's takeover bid, facing regulatory concerns and uncertain shareholder approval.

Jesus Rodriguez Aguilar

BBVA revises offer terms for Sabadell acquisition, increasing cash payment to €0.13/share and adjusting exchange ratio, facing market skepticism...

Sabadell's dividend and share buyback plan complicates BBVA's takeover bid, facing regulatory concerns and uncertain shareholder approval.