By Jesús Aguado
BARCELONA (Reuters) – The chairman of Spain’s Sabadell urged the government to be transparent about any conditions it may put on the hostile takeover bid the bank faces from bigger rival BBVA, as shareholders weigh whether to tender their shares.
The government opposes a deal that valued Sabadell at more than 12 billion euros ($13 billion) when it was announced in April, due to the potential impact on competition and jobs.
“By the time the shareholders have to decide, they should have all the information about what conditions the government might put on this deal,” Josep Oliu told journalists in Barcelona ahead of Sabadell’s shareholders meeting on Thursday.
Oliu said the government would lay down what kind of financial system it wants for Spain and look into the social consequences of the deal.
“The government can and will do whatever is convenient,” he said, adding the bid could be taken to Sabadell shareholders in July or maybe September.
Under Spanish law, the government cannot stop a bid from being made, but has the final word on whether a merger goes ahead. The Economy Ministry declined to comment.
Oliu’s comments come after Sabadell’s CEO Cesar Gonzalez-Bueno said on Wednesday he did not expect Spain’s competition watchdog to be “too harsh” on BBVA when it publishes its review of the proposed deal as soon as this month.
Ahead of Thursday’s meeting, Oliu said that Sabadell had no plans to compete with U.S. or European lenders, unlike BBVA which has a big presence in Mexico and Turkey.
At the shareholders’ meeting in Barcelona, Oliu said BBVA would have to present a “very different” value proposal than had been previously rejected by Sabadell’s board to offset all the risks and difficulties from the hostile takeover bid.
Oliu also warned that if BBVA’s current offer succeeded, it would lead to a significant “loss of customers, loss of business, which technically means negative revenue synergies”.
BBVA has made its offer subject to approval by investors owning a majority of Sabadell’s voting rights.
Around half of Sabadell’s shareholders are retail investors, so they will be key in deciding its fate. On Thursday they were set to approve the bank’s proposed shareholder remuneration.
However the assembly was expected to turn into a platform for retail investors to voice their potential concerns.
Before the meeting, Gonzalez-Bueno said he expected small shareholders not to accept the offer.
Oliu said he did not expect big institutional investors like BlackRock, Dimensional or Vanguard to make a decision until all the details were explained in the bid prospectus, which stock market supervisor CNMV has said might be approved after the government’s opinion.
The meeting was being held in Catalonia for the first time since the failed Catalan independence drive of 2017.
(Reporting by Jesús Aguado. Editing by Inti Landauro, Mark Potter and Jan Harvey)
