The last maneuver of the president of Sabadell that knocked down Carlos Torres in the final stretch of the takeover bid

«Let’s return our headquarters to Catalonia now lest it be ahead of us Carlos Torres“, the president of Banco Sabadell told his team, Josep Oliuat the beginning of this year in a new example of how the skilled Catalan banker has always been ahead of the president of BBVA.

Torres has had to neutralize all of Oliu’s moves against his hostile takeover bid for Banco Sabadell. The man from Salamanca had won all the fights until now, including the one proposed by the Government with an unusual interventionism, but he has not been able to beat the Catalan banker in the decisive battle, that of passing the takeover cutoff of reaching 30% of the capital.

Still this Thursday, a broad consensus of analysts was betting that BBVA would cross that threshold and that it could digest a second takeover bid to complete control of the bank, but it has not achieved it. Because?

Among the consulting firms that have advised BBVA in the battle, it is admitted that Sabadell’s latest maneuver has been decisive. The astute Catalan banker and his effective communicator CEO, César González-Buenosuccessfully created the expectation that Torres would achieve, at most, 30% of the capital and that he would have to launch a second takeover bid to exceed the desired 50%. That made it “smarter,” González-Bueno said, to wait to collect in cash and not in BBVA shares as in the first offer.

BBVA made an effort to try to dispel that expectation, which it considered false for two reasons: one, that the reality is that they were going to reach 50% after the confessed support of even Sabadell’s main shareholder, the Mexican David Martinez; and two, that a second takeover hypothesis would be less interesting, because it would be at the same price as the previous one and with possible additional tax costs for the seller.

However, the fact that it did not reach even 26% of the capital in the first round means that it has not convinced even all the institutional investors – funds, banks, insurance companies, among others – who are the ones who best separate the wheat from the chaff in the propaganda that has surrounded the takeover bid. A large number of analysts took it for granted, but the failure is so resounding that Torres rushed this Thursday to activate as plan B an acceleration of the pampering of the shareholder of BBVA with the highest interim dividend in its history and a share buyback that will increase its value.

Torres, who hinted this Thursday that he is not resigning, is a theoretical expert in strategy who participated in Endesa’s battle against Gas Natural two decades ago, but got off on the wrong foot by launching the takeover bid in the middle of the Catalan electoral campaign. He justifies himself because he says that he was forced to do so when a leak occurred that the banker has never attributed to Oliu, but he has not been far from saying so.

If that was the Catalan banker’s first trick, then, in any case, several have followed, such as the aforementioned one of taking the headquarters back to Catalonia last January, thus reinforcing the support of Salvador Illa and Junts and, therefore, of Pedro Sanchezto his defense against BBVA.

Torres, always in the slipstreammanaged to get, against the odds, the National Markets and Competition Commission to authorize the merger with acceptable conditions and, despite Sánchez’s coup of later subjecting the operation to a ghostly “public consultation”, rHe received support from Brussels so that the Government did not go too far in imposing additional conditions.

After overcoming political obstacles, It seemed that the easiest thing remained, to lower the ball to the field of play theoretically most dominated by the Salamancan banker: the market. But Oliu, once again, went ahead, managing to convince investors that Torres should pay more. BBVA swallowed, after previously denying it, and agreed to raise the offer, but the Catalan won with its last move: the aforementioned second takeover bid that would make the first useless.

The paradox is that the winner can be a loser and vice versa, if the analysts who considered that BBVA paid too much for Sabadell are right. The aforementioned Mexican magnate who warned that it was better for the future of the Catalan bank if the takeover bid was successful is also correct.

The result could be a sustained rise in BBVA’s stock market, by getting an expensive purchase out of the way; and descent from Sabadell, because its future alone is in question and, even more so after having lost diversification and size following the defensive sale of its British subsidiary TSB to Banco Santander for 3,000 million. Oliu has already tried alternative operations to gain size, such as a merger with Abanca, but has not been able to in the uncertain banking sector, where achieving synergies that justify mergers is increasingly difficult.

The president of Banco Santander, Ana Botínparticipated more than happily this Thursday in a lucid debate with the head of JP Morgan, Jamie Dimon in the USA. Her broad smile is not surprising, because she becomes a great indirect winner: BBVA still cannot reach Santander in size and, furthermore, it is strengthening itself in the United Kingdom, a key market for the Cantabrian entity, taking advantage of the need to sell Sabadell. The funds that sold their Sabadell shares in the market these days without waiting for the takeover bid like Bestinver have also reaped the benefits. Meanwhile, the long takeover bid has worn out the two banks BBVA and Sabadell and they now have the new challenge of convincing that the result is good for both.