European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>The CNMC’s provisional report requires BBVA to extend commitments to SMEs for three years instead of 18 months, a condition seen as manageable but opposed by Sabadell’s leadership.</li>
<li>BBVA's exchange offer for Sabadell values its shares at €2.37, below the market price of €2.504, implying a 5.3% shortfall, increasing pressure for BBVA to improve its bid.</li>
<li>The Spanish government opposes the takeover, and political intervention, regulatory hurdles, and a history of failed hostile bank takeovers in Europe could significantly impact the deal’s success.</li>
</ul>


The CNMC’s provisional report requires BBVA to extend commitments to SMEs for three years instead of 18 months, a condition seen as manageable but opposed by Sabadell’s leadership.
BBVA's exchange offer for Sabadell values its shares at €2.37, below the market price of €2.504, implying a 5.3% shortfall, increasing pressure for BBVA to improve its bid.
The Spanish government opposes the takeover, and political intervention, regulatory hurdles, and a history of failed hostile bank takeovers in Europe could significantly impact the deal’s success.


BBVA/Sabadell: Implications of CNMC Decision, How Much Should BBVA Raise?

<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

<ul>
<li>Lower Acceptance Threshold: BBVA reduced its tender offer threshold to 49.3%, excluding Sabadell’s 1.4% treasury shares to ensure voting rights focus on active shareholders.</li>
<li>Shareholder and Regulatory Hurdles: Retail shareholder resistance, extended antitrust reviews, and opposition from Spanish and Catalonian governments complicate the takeover.</li>
<li>Sabadell’s Defensive Moves: A €2.9 billion shareholder return plan, potential treasury share expansion to 10%, and Zurich’s 3% stake further reduce the offer's likelihood of success.</li>
</ul>


Lower Acceptance Threshold: BBVA reduced its tender offer threshold to 49.3%, excluding Sabadell’s 1.4% treasury shares to ensure voting rights focus on active shareholders.
Shareholder and Regulatory Hurdles: Retail shareholder resistance, extended antitrust reviews, and opposition from Spanish and Catalonian governments complicate the takeover.
Sabadell’s Defensive Moves: A €2.9 billion shareholder return plan, potential treasury share expansion to 10%, and Zurich’s 3% stake further reduce the offer's likelihood of success.


BBVA’s Bid for Sabadell: A Tough Road Ahead

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>There are people who'll take profit in <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I (3382 JP)</a> because of path dependency til year-end. It will drag out a while: buy the dips, trim on pops.</li>
<li>Just like in <a href="https://www.smartkarma.com/entities/lufax-holding-ltd-b751749a-8feb-4b4d-85a7-d99ac0308fe7" target="_blank" data-smartkarma-citation="entities:40067:1" rel="noopener">Lufax Holding (6623 HK)</a>'s special dividend, expect Ping An to boost its holding in <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology (1833 HK)</a> via the stealthy scrip dividend option. </li>
<li>The landscape for <a href="https://www.smartkarma.com/entities/nec-networks-system-integr" target="_blank" data-smartkarma-citation="entities:16396:1" rel="noopener">Nec Networks &amp; System Integr (1973 JP)</a> has FULLY changed. The details now matter quite a bit. NEC has two basic choices. Neither are that palatable.  </li>
</ul>


There are people who'll take profit in Seven &amp; I (3382 JP) because of path dependency til year-end. It will drag out a while: buy the dips, trim on pops.
Just like in Lufax Holding (6623 HK)'s special dividend, expect Ping An to boost its holding in Ping An Healthcare and Technology (1833 HK) via the stealthy scrip dividend option. 
The landscape for Nec Networks &amp; System Integr (1973 JP) has FULLY changed. The details now matter quite a bit. NEC has two basic choices. Neither are that palatable.  


Last Week in Event SPACE: Seven & I, PA Gooddoctor, Nec Networks, Genscript/Legend, ASM PT, Hanwha

<ul>
<li>The CNMC extended the BBVA-Sabadell merger review to Phase 2, adding three months to assess potential impacts and allow further stakeholder input.</li>
<li>Governmental oversight may influence or block the merger based on broader public interests, with new conditions potentially altering the acquisition terms.</li>
<li>Banco Sabadell’s robust Q3 results and excess capital position improve shareholder returns. BBVA’s offer would need an improved exchange ratio or higher cash payment to increase the deal success probability.</li>
</ul>


The CNMC extended the BBVA-Sabadell merger review to Phase 2, adding three months to assess potential impacts and allow further stakeholder input.
Governmental oversight may influence or block the merger based on broader public interests, with new conditions potentially altering the acquisition terms.
Banco Sabadell’s robust Q3 results and excess capital position improve shareholder returns. BBVA’s offer would need an improved exchange ratio or higher cash payment to increase the deal success probability.


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.  It operates in Europe, Latin America, United States, China and Turkey.

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Banco Bilbao Vizcaya Argentari (BBVA SM)

BBVA/Sabadell: Implications of CNMC Decision, How Much Should BBVA Raise?

CNMC requires BBVA to extend commitments to SMEs for 3 years, Sabadell's leadership opposes. BBVA's offer for Sabadell undervalues shares,...

Jesus Rodriguez Aguilar

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’s Bid for Sabadell: A Tough Road Ahead

BBVA faces challenges in Sabadell takeover as lower acceptance threshold, shareholder resistance, and defensive moves by Sabadell complicate the...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Seven & I, PA Gooddoctor, Nec Networks, Genscript/Legend, ASM PT, Hanwha

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

BBVA/Sabadell: Onto Phase 2

The CNMC extended the BBVA-Sabadell merger review to Phase 2, adding three months to assess potential impacts and allow further stakeholder input.

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

BBVA/Sabadell: Implications of CNMC Decision, How Much Should BBVA Raise?

​CNMC requires BBVA to extend commitments to SMEs for 3 years, Sabadell's leadership opposes. BBVA's offer for Sabadell undervalues shares,...

Jesus Rodriguez Aguilar

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’s Bid for Sabadell: A Tough Road Ahead

​BBVA faces challenges in Sabadell takeover as lower acceptance threshold, shareholder resistance, and defensive moves by Sabadell complicate the...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Seven & I, PA Gooddoctor, Nec Networks, Genscript/Legend, ASM PT, Hanwha

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

BBVA/Sabadell: Onto Phase 2

The CNMC extended the BBVA-Sabadell merger review to Phase 2, adding three months to assess potential impacts and allow further stakeholder input.

Jesus Rodriguez Aguilar

CNMC requires BBVA to extend commitments to SMEs for 3 years, Sabadell's leadership opposes. BBVA's offer for Sabadell undervalues shares,...

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

BBVA faces challenges in Sabadell takeover as lower acceptance threshold, shareholder resistance, and defensive moves by Sabadell complicate the...