Banc Sabadell shares fall as BBVA rises after takeover bid fails

Shares of Catalan bank Banc Sabadell fell more than 6% on Friday at the stock market open, following Thursday night's announcement that Basque bank BBVA's takeover bid had failed.

Shareholders of the Catalan lender rejected the offer, which received just 25% support, below the 30% needed, bringing to an end a 17-month saga.

Despite losing the takeover bid, BBVA’s shares rose between 5% and 9%. With the takeover bid off the table, the Basque bank announced it would "accelerate" its shareholder payouts.

BBVA is set to pay on November 7 the largest dividend in its history, distributing 32 euro cents per share for a total of €1.8 billion.

Banc Sabadell celebrates result

The president of Banc Sabadell, Josep Oliu, welcomed the outcome and admitted that he received the news of the failed takeover bid with "great surprise."

"I did not expect such a decisive result. We did anticipate and knew we had the full support of our retail shareholders, which gave us confidence, but I did not expect such strong backing from the rest of the shareholders," he said in an interview with Catalunya Ràdio.

Oliu attributed the failure of the takeover bid to the support of civil society, including business groups, political parties, and clients.

He stressed that both Banc Sabadell and BBVA are "very important" banks with "different projects" and that they can "create more value" for clients and shareholders as separate entities.

President welcomes 'good news'

Catalan president Salvador Illa celebrated the failed operation. "It is good news for Catalonia, its civil society, and its business network," he said.

Illa said he is committed to continuing to work "loyally" with both entities.

"They both have to continue their journey after this outcome," he concluded.

The president met with Oliu at the government headquarters on Friday.

Catalan economy minister Alícia Romero also welcomed the result.

"Shareholders have ensured the presence and balance of a bank that has always invested in SMEs and strengthened Catalonia’s business network," she said.

Speaking on behalf of the Spanish government, María Jesús Montero, the first vice president, said the process has been "immaculate and all guarantees have been respected."

"We have a magnificent banking system. Both entities are solvent, and the fact that there is no takeover changes nothing: they will continue operating as usual," she added.

'SMEs have won the game'

The president of Pimec, the SMEs business association, celebrated the failure of the operation. "SMEs have won this battle," said its president, Antoni Cañete.

The association believes that the failed operation will allow small and medium-sized companies to have "access to more competitive financing."

Cañete also noted that the initial market drop, followed by BBVA's rebound, shows that "the operation was not attractive to the market."

The association also pointed out that the decline in Sabadell's shares is partly a reaction from "speculative" shareholders who tried to profit from a potential revaluation if a second bid had been made.

'BBVA has suffered a huge blow'

The president of the minority shareholders association of Sabadell, Jordi Casas, welcomed the outcome, calling it the "expected news."

The association, which has always opposed the operation, said the "emotion upon receiving the news was intense."

"BBVA has suffered a huge blow," Casas said, adding that there has been "massive rejection."

"It is great news for both the Catalan and Spanish economies, as it prevents excessive concentration in the banking sector," he added.

'A victory for consumers'

The consumer finance association Asufin said the failed takeover bid is a "victory for consumers."

Not merging the two banks will help preserve jobs in their branches and prevent further concentration in the banking sector, Asufin added.

"Banking concentration inevitably leads to financial exclusion due to the closure of duplicate branches. The disappearance of bank offices in certain areas is the downside of the banking restructuring process we are witnessing, a process inherited from the previous financial crisis of the last decade," said Asufin president Patricia Suárez.

Specifically, Asufin points out that certain operations, such as cash withdrawals, bank transactions, or maintaining service points in sparsely populated areas, "should be considered services of general economic interest."