A month after BBVA’s failed takeover bid for Sabadell, the landscape after the battle is unique. This is even positive for the two banks involved, Opante and Opado, as they agree with those who argue that they are better off operating separately than merging.
Economically, both are doing very well. BBVA has passed the 100 billion capital hurdle on the stock market, rocketing its price from 15.79 euros on October 10th, at the end of the standard offer period for Opad shareholders, to 18.9 euros on Wednesday, November 12th. The dad market ruled. He has a positive assessment of the soundness of Basque banks. Negatively, he says the merger was a mistake.
And Sabadell reached an absolute historical record. his rally The company’s share price has been more modest than its competitors, with shares rising 8% from a trading price of 3.17 euros on October 10 to 3.429 euros this Wednesday. But in any case, it was higher than the exchange ratio offered at the time. Dad Market thus denied predictions that Banco de Catalunya would collapse after a failed takeover bid. Because, as the president of BBVA especially preached during the acceptance period, the upward competition in the Banco de Catalunya is all due to merger expectations and nothing due to improved management.
But there are other trends that should be incorporated into the behavioral manual of bankers and bank managers. Because others debunk myths. Thus, hostile takeovers in the financial sector are extremely difficult. It is more destructive than friendly, creates more noise and uncertainty, and is doomed to failure unless you are very generous. In other words, it’s very expensive for the other party. The exchange equation does not take into account advisors, advertising, or attractive dividends. And it is destined to go to the abyss. An American investment banker told Sabadell president Josep Oriu:Hostile; non-premium. no way”: If it is hostile and has no premium, it will sink.
The myth of inorganic growth through mergers as an essential means of gaining scale was also justified by the extraordinary comfort (and results) of the two subsequent entities. Both companies have an easy escape into a B plan for organic growth, through increased in-house activities and sector alliances with technology providers, insurance and payment methods… Less grandiose than a breakthrough acquisition, but perhaps more convenient. In this case, BBVA and Sabadell have had to digest an overwhelming increase in commitments regarding dividend distribution, which is the basic fuel for ensuring shareholder loyalty during a demanding career full of offense and defense.
but,”economic loyaltyCombined with other elements of “That’s not all.”brand loyalty“The business environment, regional roots, specific awareness of the social utility of the entity, etc. There, the intervention of the minority shareholders of the repressed banks was decisive, not only in terms of their own weight (about 40% of the capital), but also because large institutional investors such as investment funds and sovereign funds (not speculative investors or sharks) showed an allergy to any operations that involved conflict with other sectors of capital.”
In this way, Mr. Oriu was able to conclude that in the almost complete absence of large private physical holders, the minority is demonstrating the “hardcore” of his bank, that is, a warning to other navigators/opponents. It is true that in that case their weight in capital helps, and the fact that they link their position with that of their customers. However, there are smaller banks among other large banks. And what! These represent 36% of Santander’s capital and 35% of BBVA itself. The difference is that in that case only some were mobilized in an organized way, understanding that family independence entailed values and objectives other than economic ones, and even the “general good.” It would be logical for these voices to have representation at the top of the organization along with “independent” technocrats. And that this is reflected, if not in binding regulations, then at least in voluntary codes of conduct.
Conversely, a hardcore group formed by a large academic institution may challenge the assumed financial logic of business schools, as in this case. In other words, hardcore becomes soft.
We then arrive at the first institutional aspect of OPA, understood as follows. business case And the laboratory of the future. On the other hand, the position adopted by the relevant shareholder market regarding the perception of competition that actually exists and how it can be maintained needs to be reflected by regulators. CNMC would be wise to review its metrics, calculations, and knowledge of the actual playing field. How many of your directors and managers have worked in business and/or privately? How many have been laid off or fired for discounting their bills?
There are two other outstanding cases that are judicial in nature. BBVA’s appeal against government regulations. European Commission Procedures on Financial Law of the Kingdom of Spain. There’s a lot of fabric to cut. Right away.
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