European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>The CNMC is expected to approve the deal with mild remedies, reducing regulatory uncertainty; however, a potential Phase 3 review by the government could delay timing and introduce political risk.</li>
<li>Sabadell’s standalone defense is robust, anchored in increased dividends, buybacks, and 14%+ RoTE guidance, which have helped reposition the bank as a viable independent alternative in the market.</li>
<li>The offer’s gross spread has turned negative, reflecting investor skepticism about deal success or expectations of an improved offer; the lack of a premium currently weakens BBVA’s negotiating leverage.</li>
</ul>


The CNMC is expected to approve the deal with mild remedies, reducing regulatory uncertainty; however, a potential Phase 3 review by the government could delay timing and introduce political risk.
Sabadell’s standalone defense is robust, anchored in increased dividends, buybacks, and 14%+ RoTE guidance, which have helped reposition the bank as a viable independent alternative in the market.
The offer’s gross spread has turned negative, reflecting investor skepticism about deal success or expectations of an improved offer; the lack of a premium currently weakens BBVA’s negotiating leverage.


BBVA Faces Resistance at the Vault with CNMC’s Verdict Looming

<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.


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Shinko Electric Industries / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shinko-electric-industries" target="_blank" data-smartkarma-citation="entities:15066:1" rel="noopener">Shinko Electric Industries (6967 JP)</a>. Done. Finally. Look at whether you could borrow shares just before the close of the tender and short tender and buy back post ex-date</li>
<li>
<a href="https://www.smartkarma.com/entities/rea-group-ltd" target="_blank" data-smartkarma-citation="entities:699:1" rel="noopener">REA Group Ltd (REA AU)</a> rolls over as <a href="https://www.smartkarma.com/entities/costar-group-inc" target="_blank" data-smartkarma-citation="entities:16907:1" rel="noopener">Costar Group (CSGP US)</a> bets big on key rival Domain <a href="https://www.smartkarma.com/entities/domain-holdings-australia-ltd" target="_blank" data-smartkarma-citation="entities:26033:1" rel="noopener">Domain Holdings Australia (DHG AU)</a>.</li>
<li>
<a href="https://www.smartkarma.com/entities/macromill-inc" target="_blank" data-smartkarma-citation="entities:24026:1" rel="noopener">Macromill (3978 JP)</a>'s tender extended. Still not a done deal. Look to buy shares at terms with the goal of NOT tendering and owning the back end.</li>
</ul>



Shinko Electric Industries (6967 JP). Done. Finally. Look at whether you could borrow shares just before the close of the tender and short tender and buy back post ex-date

REA Group Ltd (REA AU) rolls over as Costar Group (CSGP US) bets big on key rival Domain Domain Holdings Australia (DHG AU).

Macromill (3978 JP)'s tender extended. Still not a done deal. Look to buy shares at terms with the goal of NOT tendering and owning the back end.


Last Week in Event SPACE: Shinko Electric, REA Group, Macromill, CNBM, Prosus/Tencent

<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?

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

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 Faces Resistance at the Vault with CNMC’s Verdict Looming

BBVA’s hostile bid for Sabadell faces regulatory, political, and market hurdles. As the CNMC decision nears, I analyze deal economics, timing, and...

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

Last Week in Event SPACE: Shinko Electric, REA Group, Macromill, CNBM, Prosus/Tencent

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: 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

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

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52-week Range

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P/E

Dividend (Yield)

BBVA Faces Resistance at the Vault with CNMC’s Verdict Looming

BBVA’s hostile bid for Sabadell faces regulatory, political, and market hurdles. As the CNMC decision nears, I analyze deal economics, timing, and...

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

Last Week in Event SPACE: Shinko Electric, REA Group, Macromill, CNBM, Prosus/Tencent

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: 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

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

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

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