The president of BBVA sent a letter on Sunday to his colleague at Banco Sabadell informing him that he could not offer more than the announced exchange (4.83 shares of the Catalan entity for each of BBVA). “The market has also made it clear that there is no further possibility of an increase,” he argued.
Sabadell Bank has made public a letter sent to him in the past SundayA day before he rejected the merger proposal, BBVA chairman Carlos Torres informed him that there was “no room” to improve the merger offer “in economic terms.”
“I am writing to you as a follow-up to the email I sent you last Tuesday and in which I attached our proposal with the conditions for a merger. I understand that you are evaluating it extensively in order to give us an answer, and in that sentence I think it is very important that your advisory administration knows that BBVA there is no room to improve your economic conditions‘, according to the text Torres sent to his counterpart at Banco Sabadell, Josep Oliu.
The Catalan entity made public the full contents of the letter in a communication to the National Securities Market Commission (CNMV), five days after BBVA launched its proposal.
Torres argued that a higher premium could not be offered, recalling that since the launch of the merger offer, “the market has also made it clear that there is no further possibility of an increase, as the market capitalization of BBVA in the period of which more than 6000 million euros”.
The president of BBVA informed his counterpart at Sabadell that the exchange ratio proposed for the merger (4.83 Sabadell shares for each BBVA share, which equates to 2.26 euros per share at the time of the offer) a “significant premium” of 30% compared to April 29 prices.
Just one day after that letter, Banco Sabadell rejected BBVA’s offer, saying it alone would generate more value.
Following the publication of the letter, the Catalan entity’s shares on the stock market fell by almost 3%, while those of BBVA rose by 2%.
Source: EITB
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
