The Moody’s qualifications agency launched a notice to BBVA after reminding the bank that chairs Carlos Torres that your offer in the hostile OPA by Banco Sabadell values the entity “below its current market price.”
When the operation has entered its final stretch, more and more skeptical opinions are with the final fate of the OPA, which has entered into swampy terrain, especially after the good results presented by the Catalan bank.
The acceptance period will only occur once the operation of the operation by the National Securities Market Commission (CNMV) is approved.
This period will last between 15 and 70 days, which “potentially delay the end of the operation until September,” too much margin of maneuver so that Sabadell ends up squeezing her accounts and offers arguments to spare to her shareholders to reject the operation.
BBVA, before the dilemma of improving the OPA
In this long summer scenario, Moody’s not only remembered BBVA that he is paying less than the Vallelesan entity is worth, but also put the possibility that BBVA improves its offer even in the acceptance period.
Improvement is a discarded possibility to satiety by BBVA. There are weight reasons, as it would be an overrun of about 1.5 billion, according to the sources consulted by finance.com.
According to Deutsche Bank estimates views by finance.com, a 10% improvement on the current assessment of Sabadell would cost BBVA about 1.5 billion additional euros, which would imply a negative capital impact of -25 basic points. This would be the limit to maintain a CET1 capital ratio above 12%.
BBVA has now denied any intention to improve its offer, but the German bank does not completely rule out “an increase in cash, as expected by the market, against the current exchange of shares.”
The calendar, great enemy of BBVA
If the good results of Sabadell are already a great inconvenience for the BBVA OPA, the second great enemy is the calendar.
With the approval of the insured CNMC and the open public consultation, the ball is now on the government roof. The Ministry of Economy has 15 business days to accept the conditions imposed or raise the issue to the Council of Ministers.
Since the government had already made clear its reservations, the decision is expected to be taken to the Council, which would open a new review period of up to a month (natural), during which it could evaluate the operation based on the general interest (social and territorial cohesion).
This last situation “could make the less attractive agreement for BBVA,” according to Moody’s. Afterwards, the CNMV will formally authorize the offer to begin the acceptance period, which will require a minimum acceptance of 50%.
“Since the resolution could coincide with the holiday period, we do not rule out that the CNMV opts to postpone the start of the acceptance period until September, although this is not yet clear,” said Deutsche Bank.
Given the imponderables that the calendar poses, the US agency reminded BBVA that it would still have the acceptance period to raise its offer and unblock the OPA. The problem is that if the Basque Bank goes beyond 1,500 million euros, the accounts would already be negative for their own shareholders.
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