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Gordon Gekko and the Loot Doctrine

Gordon Gekko and the Loot Doctrine

Santander finally crossed paths with BBVA yesterday in pursuit of Sabadell. Once again, you could say. The bank chaired by Ana Botín is following the lead set by her father, Emilio, which can be summed up by not missing a single bid when it decides to take the plunge. This approach considers Excel to be an important element, but far from being the determining factor in assessing the price when the objective is clear.

Ana Botín and Francisco González in a 2017 image

Dani Duch

Exactly the opposite of the approach followed by Carlos Torres's predecessor as BBVA president, Francisco González, whose very cautious or conservative approach consisted of always trying to buy at the lowest price. This approach left the latter far behind his eternal competitor. The latter always considered price a subordinate variable to the main objective: getting the piece.

Once again, the leader of the Spanish banking sector seems to be taking advantage of the tribulations of the eternal aspirant.

Now, that doctrine has been applied to a transaction that, in addition to the financial returns Santander hopes to achieve from the purchase of British TSB, poses an objective obstacle—whether insurmountable or not remains to be seen—for BBVA's takeover bid for Sabadell. Once again, the leader of Spanish banking appears to be profiting from the travails of the eternal aspirant to a certain parity. "If you need a friend, get a dog," as Gordon Gekko advised in the film Wall Street.

The effects of the sale, for a figure much higher than speculated, on BBVA's acquisition of Sabadell have been a matter of debate for days.

Technically, BBVA should only subtract the sale from the value it attributed to its stake in Sabadell and adjust the offer accordingly. This would increase the proportion of cash to shares, since now, instead of a bank in the United Kingdom, Sabadell would have cash on hand, available to the new owners if the takeover bid were successful.

But of course, Josep Oliu, the president of the Catalan bank, has already announced that he will allocate the majority of the amount, 2.5 billion euros, to dividends, more than double the amount announced for this year, which was already a huge increase. Shareholders eligible for this super dividend must hold Sabadell shares at the time the sale is completed; in other words, they should have rejected the takeover bid.

Now, Sabadell's management can argue that its promise to continue offering pleasant monetary surprises is confirmed every day. Furthermore, with the sale of TSB alone, it has realized more than a third of the total value of what BBVA is offering for the entire bank. This is confirmation, they say in Sant Cugat, that Torres isn't offering them what he's worth.

On the other hand, those who argue that the takeover bid still has plenty of life left point out that the limitations imposed by the government, which could complicate the realization of most of the expected €850 million in synergies, represent a minimal, almost negligible, percentage of a transaction worth more than €11 billion. The cat-and-mouse game continues. And we'll see how many more twists and turns it has yet to play.

lavanguardia

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