Latest news with #Sabadell
Yahoo
2 days ago
- Business
- Yahoo
Explainer-BBVA's battle for Sabadell faces Spanish government decision
By Jesús Aguado MADRID (Reuters) -The Spanish government is set to decide next week on whether to impose additional conditions on BBVA's 14 billion euro($16.23 billion) hostile bid for smaller rival Sabadell before giving it its approval. Madrid, which has opposed the deal since it was announced in April last year because of fears over job losses, said last month that ministers would examine the offer, a rare move which drew a rebuke from the European Union. The complex, lengthy process may act as a test whether European bank M&A deals, several of which were announced this year, can get over the line. In the latest twist, Sabadell this week said it had received expressions of interest in its British unit, TSB, which analysts say could be a defensive move to ward off BBVA. Below are some of the likely next steps in what would be Spain's second-biggest banking deal by assets. WHAT HAPPENS NEXT? The government has until June 26 to review the bid and is expected to do so at a June 24 cabinet meeting, considering broader "common interest" criteria beyond the Spanish competition watchdog's competition-focused approval. Economy Minister Carlos Cuerpo has suggested that the government's concerns revolve around financial inclusion and territorial cohesion. While the European Union has urged Madrid to honour the regulator's decision, Spain has the right to impose conditions related to national defence, public safety, or environmental protection. HOW CAN THE 'COMMON INTEREST' CRITERIA BE APPLIED? It is not entirely clear. Financial advisory firm MKP Advisors says the law is vague enough to allow the government to effectively scupper the takeover, although it cannot actually stop BBVA from buying Sabadell shares. BBVA Chairman Carlos Torres says Madrid can only uphold the conditions from the Spanish competition regulator, or even "soften" them. In a radio interview broadcast on Wednesday he also said BBVA had an option of challenging the government's decision in court or even accepting it and appealing it later. However, Sabadell's CEO Cesar Gonzalez-Bueno reckons Madrid can impose harsher conditions on grounds of common interest. SABADELL'S DEFENSE - SELLING TSB? Sabadell has taken some steps to bolster its independence, increasing payouts for 2024 and 2025 as an incentive to keep shareholders on board. Broker RBC said a potential sale of its British unit could also be seen as a defensive move since cashing in on TSB sale may have been part BBVA's calculations. By offloading the unit and distributing the proceeds to current shareholders, Sabadell could make itself less appealing as a target. BBVA's Torres has said that the bank has accounted "a fairly high value" of TSB in its calculations for Sabadell's bid. RBC analyst Pablo de la Torre Cuevas said that BBVA could still adjust its offer if the sale went through. Converting interest in TSB into a sale will not be easy. Spanish legislation requires boards of target companies to remain passive and request shareholder approval before doing anything that might prevent an acquisition from succeeding. IS A MERGER GUARANTEED? No. Harsher measures could make BBVA walk away, which it has said is an option. The stock market supervisor is waiting for the government's decision before approving the formal bid, which then BBVA would follow with a formal offer and Sabadell shareholders would have 30 to 70 days to tender their shares. While the government can later block a full merger making the banks operate independently, BBVA could still aim to secure the majority of voting rights or 49.3% of Sabadell's capital. That would allow it to appoint new board members and try to integrate the bank at a later stage. In his June 18 interview, Torres said a deal without a full merger, while not a preferred outcome, would still make sense. He has previously said that would still allow BBVA to achieve most of the targeted cost savings. Sabadell rejects that idea. DO MARKETS EXPECT A TAKEOVER? Judging by the performance of both banks' shares, investors seem to expect a deal with BBVA sweetening its offer, even though it has ruled it out. It is unlikely BBVA will improve its offer until it reaches the bid acceptance period and technically it can do it until five days before it ends. Sabadell's shares already trade above the original 30% premium BBVA offered over the closing price of Sabadell shares before the bid's announcement, and have since outperformed BBVA shares, now valuing the target bank at around 14 billion euros. "The only explanation for it trading at a premium is that the market is still expecting a higher offer," said Nicolas Lopez, Singular Bank's head of equity research. ($1 = 0.9333 euros) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
2 days ago
- Business
- Reuters
Explainer: BBVA's battle for Sabadell faces Spanish government decision
MADRID, June 19 (Reuters) - The Spanish government is set to decide next week on whether to impose additional conditions on BBVA's ( opens new tab 14 billion euro($16.23 billion) hostile bid for smaller rival Sabadell ( opens new tab before giving it its approval. Madrid, which has opposed the deal since it was announced in April last year because of fears over job losses, said last month that ministers would examine the offer, a rare move which drew a rebuke from the European Union. The complex, lengthy process may act as a test whether European bank M&A deals, several of which were announced this year, can get over the line. In the latest twist, Sabadell this week said it had received expressions of interest in its British unit, TSB, which analysts say could be a defensive move to ward off BBVA. Below are some of the likely next steps in what would be Spain's second-biggest banking deal by assets. The government has until June 26 to review the bid and is expected to do so at a June 24 cabinet meeting, considering broader "common interest" criteria beyond the Spanish competition watchdog's competition-focused approval. Economy Minister Carlos Cuerpo has suggested that the government's concerns revolve around financial inclusion and territorial cohesion. While the European Union has urged Madrid to honour the regulator's decision, Spain has the right to impose conditions related to national defence, public safety, or environmental protection. It is not entirely clear. Financial advisory firm MKP Advisors says the law is vague enough to allow the government to effectively scupper the takeover, although it cannot actually stop BBVA from buying Sabadell shares. BBVA Chairman Carlos Torres says Madrid can only uphold the conditions from the Spanish competition regulator, or even "soften" them. In a radio interview broadcast on Wednesday he also said BBVA had an option of challenging the government's decision in court or even accepting it and appealing it later. However, Sabadell's CEO Cesar Gonzalez-Bueno reckons Madrid can impose harsher conditions on grounds of common interest. Sabadell has taken some steps to bolster its independence, increasing payouts for 2024 and 2025 as an incentive to keep shareholders on board. Broker RBC said a potential sale of its British unit could also be seen as a defensive move since cashing in on TSB sale may have been part BBVA's calculations. By offloading the unit and distributing the proceeds to current shareholders, Sabadell could make itself less appealing as a target. BBVA's Torres has said that the bank has accounted "a fairly high value" of TSB in its calculations for Sabadell's bid. RBC analyst Pablo de la Torre Cuevas said that BBVA could still adjust its offer if the sale went through. Converting interest in TSB into a sale will not be easy. Spanish legislation requires boards of target companies to remain passive and request shareholder approval before doing anything that might prevent an acquisition from succeeding. No. Harsher measures could make BBVA walk away, which it has said is an option. The stock market supervisor is waiting for the government's decision before approving the formal bid, which then BBVA would follow with a formal offer and Sabadell shareholders would have 30 to 70 days to tender their shares. While the government can later block a full merger making the banks operate independently, BBVA could still aim to secure the majority of voting rights or 49.3% of Sabadell's capital. That would allow it to appoint new board members and try to integrate the bank at a later stage. In his June 18 interview, Torres said a deal without a full merger, while not a preferred outcome, would still make sense. He has previously said that would still allow BBVA to achieve most of the targeted cost savings. Sabadell rejects that idea. Judging by the performance of both banks' shares, investors seem to expect a deal with BBVA sweetening its offer, even though it has ruled it out. It is unlikely BBVA will improve its offer until it reaches the bid acceptance period and technically it can do it until five days before it ends. Sabadell's shares already trade above the original 30% premium BBVA offered over the closing price of Sabadell shares before the bid's announcement, and have since outperformed BBVA shares, now valuing the target bank at around 14 billion euros. "The only explanation for it trading at a premium is that the market is still expecting a higher offer," said Nicolas Lopez, Singular Bank's head of equity research. ($1 = 0.9333 euros)
Daily Mirror
2 days ago
- Business
- Daily Mirror
Santander 'eyeing up takeover of rival UK bank' after major firm put up for sale
Sky News has cited City sources who claim that Santander has contacted Banco Sabadell, the Spanish parent company of TSB, about a possible takeover Santander has reportedly approached the owner of TSB about a potential takeover of the UK high street bank. Sky News has cited City sources who claim that Santander has contacted Banco Sabadell, the Spanish parent company of TSB, about a possible takeover. Sabadell confirmed earlier this week that TSB is up for sale and said it had received interest about an acquisition, but did not name who had expressed interest. Sabadell and Santander, also a Spanish bank, have so far declined to comment on the report. TSB has around 175 bank branches in the UK, while Santander has 444 locations, but revealed plans earlier this year to shut 95 branches. The closures will leave Santander with 349 physical sites. Sabadell said: 'Banco Sabadell will assess any potential binding offer it may receive. Naturally, any transaction would be subject to the satisfaction of all legal obligations.' The reports of its interest in TSB come after the executive chairman of Santander denied the high street lender was looking to the UK. Speaking at the World Economic Forum in Davos in January this year, Ana Botin denied said Santander would remain in the UK 'into the future'. She said: 'We love the UK. It's a co-market and will remain a co-market for Santander. Punto [full stop].' The bank has been in the UK since it purchased Abbey National in November 2004. Sabadell is currently in the middle of rebuffing a takeover attempt by Spanish banking group BBVA, a deal which is opposed by the Sabadell board and government in Spain. BBVA has launched an €11billion (£9.4billion) move to take control of Sabadell. It comes a decade after Sabadell bought TSB for £1.7billion in the UK, a year after Lloyds had spun off TSB in a stock market float. TSB recently reported a £101million pre-tax profit in the first quarter, nearly double what it made a year ago. Meanwhile, Santander has reported pushed back bids from NatWest and Barclays to buy its UK retail bank. The Mirror has recently published a list of banks closing in June. There were 79 bank branches set to close for good this month, including 16 Lloyds branches, 15 Halifax, 24 Natwest, 23 Santander, and one TSB. According to a report from the consumer group Which?, banks and building societies have closed over 6,300 high street branches at a rate of 53 per month over the last decade. This represents 64% of the branches which were open back in 2015. Banks say the decline in high street branches has been driven by a rapid increase in online and mobile banking, and a rapid decline in the use of physical branches.
Spectator
3 days ago
- Business
- Spectator
Mark Carney, the mischief-making pin-up
Well, would you look at Mark Carney. Just three months ago I described the incoming prime minister of Canada and former governor of the Bank of England as 'a fish-out-of-water technocrat' who made little public impact over here and was swiftly forgotten after he left in 2020. When I once came across him hunched and dark-suited in the Pret queue at King's Cross, midway through his Bank tenure, I actually felt sorry for him. But here he is, beer-swigging in an Ottawa bar with Sir Keir Starmer; cutting Donald Trump short in a press call before the G7 meeting; shedding his eco-credentials to champion Canadian oil and gas; and generally looking the statesman at ease with his people. What happened? A Canadian connection tells me the answer is all to do with Carney's paternal ancestry in Ireland's County Mayo: 'He's unleashed his inner leprechaun and he's on a mission to make mischief for the big orange buffoon south of the border. What's more, the ladies think he's hot.' It makes me wonder about his charisma-free Bank of England successor, Andrew Bailey, who has barely been seen in public this year. What leap on to the world stage might he be planning for his next career? Fever in the air Would a flurry of merger-and-acquisition activity in the banking sector constitute evidence of rude health – or a cyclical warning of troubles ahead? Metro Bank, the glossy but struggling high-street challenger, is being stalked by a private equity outfit called Pollen Street Capital. Santander last month rejected an £11 billion offer for its UK network from the reinvigorated NatWest. TSB, the former Trustee Savings Bank that was sold by Lloyds to Banco Sabadell of Spain a decade ago, is for sale again with its five million customers, while Sabadell itself fights off a takeover bid from its domestic rival BBVA. All across Europe, says one LinkedIn commentary, 'bank M&A fever is in the air'. Behind all this is a growing belief that expansion by takeover might now be a better use of surplus capital than share buybacks – and will deliver economies of scale in a sector that would benefit from consolidation to fight digital disruptors. The counterargument is that all banking mergers, especially across borders (as Sabadell discovered with TSB), are fraught with management conflicts and incompatible IT systems. And ambitious bidders who claim they're building regional or global champions are too often tempted to overpay. Caveat emptor – and let's hope the regulators stay ahead of the new game. Flight risk A news story with painful implications for London's insurance market has reached a largely unnoticed turning point – though perhaps not a final conclusion – in the High Court. This is the £3.4 billion case of 147 commercial aircraft which had been leased to Russian carriers but were effectively stolen on 10 March 2022, days after Vladimir Putin's invasion of Ukraine, when Moscow legislators made it impossible for the planes to be repossessed by their lessors – of whom the largest is an Irish company, AerCap. Insurers led by Lloyd's of London refused to pay out on the lessors' 'war risks' cover, but Mr Justice Butcher has now ruled that they must, on the grounds that the loss is not a commercial matter but the result of an act of the Russian state. As indeed it was: my man who tends the Kremlin vegetable plot tells me this was a carefully pre-planned heist which won promotion for the aviation minister responsible. Meanwhile, the insurers are also being pursued in the courts of Dublin, the world capital of aircraft leasing. But the hope is that settlement will now be reached between all the western parties and their well-remunerated lawyers, while the lost fleet continues flying within Russian airspace for as long as its operators can source illicit spare parts. A curious sidelight on the way the money world works is that I happen to be a trustee of a small Yorkshire charity which is awaiting a payout of a different kind, in the form of a legacy from a deceased benefactor who happened to be a Name on some of the Lloyd's underwriting syndicates that insured the aircraft in question. So our transformational bequest will be reduced, at several removes, by the evil hand of Putin. Pottery dame In a birthday honours list on which business barely got a look in, I was delighted to see a DBE for the potter Emma Bridgewater, whose cheerful mugs and bowls fly the flag for the traditional craft of Stoke-on-Trent in defiance of foreign competition. After starting her venture 40 years ago because she could not find a cup and saucer she liked as a present for her mother, Bridgewater built it up to employ more than 450 people and achieve peak annual sales in 2022 of £38 million. But it has since fallen into losses and 'workforce optimisation', so I hope the gong encourages her to battle on. I'm confident she'll do so, having encountered her feistier side a couple of years ago in a ding-dong debate over dinner at the Aldeburgh literary festival. The trigger was a reference by me to another Stoke-on-Trent venture with a female chief: namely the Bet365 sports betting empire led by the UK's highest-paid executive, Denise Coates, who I have also occasionally praised here for her entrepreneurial thrust and whose personal pay package is a multiple of the Bridgewater company's entire turnover. Insensitively, I argued that in the evolution of 21st-century capitalism, regulated online bookmaking is as worthy as manufacturing if it brings new wealth, jobs, tax revenues and philanthropic funding to the post-industrial Potteries. The riposte was fierce, but if there's ever an opportunity for another round, I think I might add that honours, as it were, are now equal: Coates has pots of money but Bridgewater's pots have made her a Dame.
Daily Mail
3 days ago
- Business
- Daily Mail
Santander eyes TSB takeover after rival Sabadell puts the British lender up for sale
Santander has reportedly approached Spanish rival Sabadell about a takeover of British lender TSB. Sabadell has put TSB, which has 175 UK branches, up for sale and said it had received preliminary expressions of interest. Sky News reported Santander was among them, despite persistent speculation that its own UK network is also for sale. Its interest appears to imply that Santander boss Ana Botin is open to expansion here. Analysts see UK-listed NatWest as the most likely buyer for TSB after the Treasury sold its last stake in the bank last month. Sabadell put TSB up for sale as it fights off Spanish lender BBVA's £9billion hostile takeover approach. Hugo Cruz and Ban Maher, analysts for KBW Europe, said it would 'make sense for Sabadell to consider its options' with TSB having 'limited synergies with the rest of the group'. A report in the Financial Times that TSB could be sold for £1.7billion to £2billion might be 'too low' for Sabadell, which bought it for £1.7billion in 2015, the analysts said.
