The two extraordinary meetings of Banco Sabadell, held in the middle of August, have cleared the way for a major operation: the divestment of TSB and an extraordinary cast of 2.500 millones de eurosThe message to the market is clear: the Catalan entity strengthens its solo route and places the BBVA takeover bid at a point of maximum tension.
The council arrived at the meeting with prior support and the backing of firms such as ISS and Glass Lewis. In parallel, from BBVA, its CEO Onur Young has hinted that, after the meetings, they could rethink the offer, including the option to withdraw it if it does not create value.
What the double board approved and how the operation is going
Shareholders gave the green light to sell TSB a SantanderUK for a starting price of 2.650 million pounds (about about 3.050-3.098 billion euros), subject to adjustments up to 2.875 million pounds if the closing occurs at the end of the first quarter of 2026 (approximately 3.361 billion euros). The contemplated schedule sets the completion by March 2026, subject to regulatory authorizations.
A was also approved extraordinary dividend of 0,50 euros per share (approximately 2.500 billion euros) linked to this divestment. Shareholders on the payment date Those who can collect it will be the ones who will be entitled to it; those who sell before or participate in the takeover bid will not be entitled to that amount.
Participation in the event was high: the following attended: 74,8% of the capital, the highest quota since 2004, and the decisions went ahead with support close to 99,7%This support reinforces the strategy of maintaining independence and returning capital without compromising the solvency nor the capacity for organic growth.
Market analysts point out that the sale is agreed at a demanding multiple at an opportune time: UK faces slowdown and possible cuts Bank of England, factors that could erode TSB's value in the future. Other experts highlight the strategic shift: a greater focus on Spain and creating shareholder value.
Effects on the takeover bid: incentives, timing, and possible scenarios
Combining sale of TSB and mega dividend complicates the takeover equation. The offer premium has diluted in the market and various investors are demanding that BBVA additional cash component to make it more attractive. Large houses like Citi, Deutsche Bank, Barclays or Alantra have spoken out in that line, proposing from adding cash to improvements that exceed the 2.000 million.
From the dome of the opante bank, Onur Young has reiterated that “there is no guarantee of anything"and they will decide the next steps after evaluating the boards. The offer is subject to a critical mass close to half of the capital of Sabadell, and BBVA has left open the possibility of remove it if it does not meet its value creation threshold.
Regarding regulations and timing, BBVA postponed the sending of the brochure to incorporate the half-year results and board decisions, with the intention of launching it towards the end of August or beginning of September. acceptance period could start in mid-September and last between 30 and 70 calendar days. Even if the takeover bid is successful, the Government has imposed a veto of minimum integration of three years (with an option for two more), limiting synergies in the short term.
The tax impact also influences the decision of each retailer, since the operation is not tax-neutral and the acceptance of the takeover bid may involve taxation for the capital gain. From Sabadell, clients with shares deposited in the entity are reminded that they have a calculation tool to estimate that effect.
BBVA's exchange, valuation and capital buffer
The current proposal contemplates 1 new BBVA share traditional 0,70 euros in cash For each 5,3456 shares from Sabadell. After the ordinary dividend Of the 0,07 euros that Sabadell will pay at the end of August, BBVA has anticipated an adjustment in the equation until 1 share and 0,70 euros for every 5,5483 shares.
Successive adjustments have reduced the future participation of the Sabadell shareholders in the combined bank, moving from the environment of the 16,17%. initially at approximately 14,2%.. In addition, the implied valuation of the takeover bid is below the stock market capitalization current, with a difference of around 2.600 millones de euros.
In terms of resources, BBVA has a CET1 ratio of 13,34% and a capital surplus greater than 4.400 millones de euros above its highest target, even discounting cash commitments already announced for the takeover bid. Although it will operate without integration during the period established by the Government, this cushion remains considerable.
With that margin, the bank could—if it chooses to do so—refine its strategy of bolstering the offering with more cash, a condition that some experts see as necessary to increase the chances of success. However, others warn that an excessive increase could strain the price of the bank and affect its financial discipline.
Risks and strengths of continuing alone
Sabadell's plan contemplates remunerate 6.300 billion until 2027, combining dividends and buybacks. Although this policy has been supported by shareholders at meetings, it involves withdrawing a significant portion of capital and, consequently, reduces the entity's capacity to cope with adverse shocks. The stress tests of the European Banking Authority They have identified Sabadell as one of the entities that must monitor its position in severe scenarios.
Management argues that balance sheet management is efficient: it returns excess capital that it does not need for organic growth and focuses on the business in Spain. Recent results, with solid profits and good performance in Shopping bag, support this strategy, although economic cycles and rate normalization trends advise caution.
In labor and commercial matters, unions warn of possible increased demands on the network if TSB is lost as a source of revenue. Furthermore, the social and political context, unfavorable to large-scale bank mergers, has influenced regulatory caution and the design of the takeover bid.
With the meetings completed and the numbers clear, the process enters its decisive stage: BBVA will decide whether maintains, improves or withdraws your proposal when publishing the updated prospectus, while Sabadell partners will have to evaluate between the mega dividend and the final exchange ratio. The outcome will depend on whether the structure and price of the offer balance risk, return and times mutually.
