Banco Sabadell soars 7.4% and BBVA falls 1%, in the heat of the merger proposal

MADRID, 2 May.

Banco Sabadell soars 7.4% and BBVA falls 1%, in the heat of the merger proposal


Banco Sabadell shares have skyrocketed this Thursday on the stock market, leading the rises of the Ibex 35 with gains of almost 7.4%, driven by the exchange proposed for the merger with BBVA.

Specifically, the securities of the financial institution chaired by Josep Oliu lead the Spanish selective with a rise of 7.38% at 9:40 a.m., to 1.9285 euros, after having surpassed a rise of 8% in the first moments of the session.

For its part, the shares of the bank chaired by Carlos Torres were on the losing side, with a fall of 1.08%, to 10,065 euros per share.

This Wednesday, BBVA communicated to the National Securities Market Commission (CNMV) a letter sent to the board of directors of Banco Sabadell in which it proposes a merger by absorption with an exchange of 1 newly issued BBVA share for every 4.83 shares of Banco Sabadell, which represents a premium of 30%, assuming that no distributions of dividends, reserves or any other distributions would be made by any of the companies to their respective shareholders.

This exchange equation represents a premium of 30% over the closing price of Sabadell and BBVA last Monday, April 29, the day before this potential operation became known. The entity also indicates that it implies a premium of 42% with respect to the weighted average prices of the last month, and 50% considering the last three months.

Last Tuesday that premium had already been reduced to 17.29%, because Sabadell rose 3.37% on the Stock Market and BBVA plummeted 6.65% when it was learned that there were again talks to integrate both banks.

The letter details that BBVA would attend to the exchange of Banco Sabadell shares through the issuance of new ordinary shares whose subscription will be reserved for holders of Banco Sabadell shares and for which admission to trading on the Spanish Continuous Market would be requested. in the remaining markets in which its shares are listed.

The specific offer would propose the incorporation as non-executive directors to the BBVA board of directors of three members of the current board of directors of Banco Sabadell, chosen by mutual agreement between both parties. One of these directors would be proposed as one of the vice presidents of the BBVA Board of Directors.

The entity resulting from the merger would have one of its Group operational headquarters in Catalonia, which would be established in the Banco Sabadell corporate center in Sant Cugat.

The corporate name and brand would be those of BBVA, "although the use of the Banco Sabadell brand could be maintained, together with the BBVA brand, in those regions or businesses in which it may have a relevant commercial interest," as detailed. in the letter.

In the letter, BBVA emphasizes that the combination of both entities would give rise to "the most attractive industrial project of European banking. In this sense, it highlights the benefits of the merger for both entities, their shareholders, employees, clients and the companies in which they are located. that operate".

BBVA assures that the new entity "would become one of the largest and most solid financial entities in Europe, with total assets over one trillion euros and more than 100 million clients worldwide, with the ambition of being the largest bank by stock market capitalization of the euro zone".