Banco Sabadell decides to move its headquarters back to Catalonia, marking a definitive end to any possibility of reconsidering the merger with BBVA – which would have been located in Sabadell, at Plaça de Sant Roc nº 20, as agreed by the board on Wednesday. Last May, Sabadell’s board rejected BBVA’s proposal because it undervalued the bank, even after the president of the Basque group, Carlos Torres, communicated his best offer in writing. Despite BBVA’s public insistence that there would be no improvement, some sources suggest that there was still room for a final attempt to convince Sabadell’s board.
The optimal time to play the trump card with a higher bid would be before the formal acceptance period of the merger, as long as the conditions set by the National Commission of Markets and Competition (CNMC) are acceptable to BBVA. The recent increase in Sabadell’s share price has rendered the proposed stock exchange and dividend mix unattractive, leading analysts to believe that the merger will not go through unless the offer is improved, at the very least by 10 to 20% and includes a cash component.
Moving back to Catalonia is seen as a point of no return, reflecting a personal decision by President Josep Oliu, fully supported by CEO César González-Bueno. This decision aims to return to Sabadell’s roots, which had its headquarters in the town that bears the bank’s name since its foundation in 1881 until the process and risk of secession forced its relocation to Alicante. The return to Catalonia was approved by the board on Wednesday and will allow the next shareholders’ meeting to be held in Sabadell, where the bank plans to discuss reinstating share buybacks to enhance investor returns.
The move comes at a time when the situation in the region has normalized, following Salvador Illa’s (PSC) victory, which has toned down the pro-independence rhetoric from the Generalitat and is encouraging companies to return to restore productivity. The return to Catalonia has been positively received by several members of the Council of Ministers, who view it as a signal of normalization in the region.
The government did not appreciate BBVA launching the merger in the midst of Catalan elections without consulting Sabadell and has warned that it will veto the merger. This return to Catalonia also aligns with the demands of the Junts government partners, who have called for incentives to bring companies back to the region to support Sánchez’s investiture.Sabadell closes the door to accepting a price improvement from BBVA with the headquarters relocation
Sabadell has definitively ruled out accepting a better price from BBVA for a merger due to the transfer of headquarters. This decision could impact the future of the financial sector in Spain.
Impact on the Financial Sector
The refusal of Sabadell to negotiate a higher price from BBVA could have a ripple effect throughout the financial sector. It showcases the competitiveness and strategic decision-making process within the industry.
Potential Consequences for BBVA
With Sabadell’s firm stance, BBVA may need to reconsider its approach to the merger or explore alternative options. This could lead to a shift in dynamics within the banking sector and impact market confidence.
Effects on Shareholders and Investors
Shareholders and investors are closely monitoring the developments between Sabadell and BBVA. Any decisions made by these institutions can have a direct impact on stock prices and investment strategies in the market.
In conclusion, Sabadell’s decision to reject a price improvement from BBVA signifies a pivotal moment in the financial landscape of Spain. The repercussions of this choice extend beyond the two institutions involved and could shape the future trajectory of the banking sector.
