Sabadell believes that the sale of TSB makes BBVA's takeover bid more expensive and more difficult.

Although Sabadell tried yesterday to separate the sale of its British subsidiary TSB from the hostile takeover bid by BBVA, the Catalan bank's CEO, César González-Bueno, acknowledged that the divestment makes the transaction more expensive and difficult. He cited as an example what happened yesterday on the stock market when the performance of Sabadell and BBVA became uncoupled, with the former rising 5.22% versus the latter's 1.44%.

The first effect is that yesterday the premium was negative at -10%. This means that if the takeover bid had been made yesterday, shareholders who had accepted BBVA's offer would have lost almost 10%. Market sources indicated that it was normal for Sabadell's stock price to rise because the price paid for Santander (€3.1 billion) is higher than the average analysts expected.

"This transaction increases Sabadell's value. If we previously considered the takeover bid to be insufficient, now it's even more so," González-Bueno said at a press conference at the bank's operational headquarters in Sant Cugat del Vallès, accompanied by Chief Financial Officer Sergio Palevecino.

Regarding the price paid by Santander, the CEO of Banc Sabadell denied that he was influenced by Santander wanting to harm its main rival in Spain, BBVA. At Santander, "they are capable of extracting more value from TSB than we are," he reflected. Santander explained on Tuesday that it expects 400 million in synergies from the purchase.

Sabadell sees it as irrelevant who initiated the sale negotiations.

With the money raised from the sale of TSB, Sabadell's board will propose to shareholders that they approve—in addition to the transaction—the distribution of an extraordinary dividend of 2.5 billion euros. Regarding the possibility that a new board of directors appointed by BBVA in the coming months (if the takeover bid is successful) could reverse the decision to distribute extraordinary dividends on account of the sale, González-Bueno asserted that it is not possible. "The new board can reverse many decisions, but what it cannot do are the rights acquired by the shareholders. It cannot happen," he explained.

Regarding the possibility that the sale of TSB could weaken Sabadell's position in the future, given that it could be more easily acquired by a third party as a smaller entity, González-Bueno responded that further hostile takeover bids in Spain are not possible: "I can't imagine BBVA trying a third time, I don't expect Santander, and I don't expect CaixaBank," he concluded.

The CEO clarified, in response to questions from journalists, that the dividends will be distributed next year to current shareholders. Therefore, as Chairman Josep Oliu warned in a video the day before, shareholders who choose to sell their shares to BBVA will be left without the dividend of 50 cents per share. In total, the remuneration Sabadell has committed to its shareholders amounts to approximately 28% of the value of the shares.

In response to concerns expressed about the board's duty of passivity, which obliges it to refrain from making decisions that could harm the takeover bid, the executive insisted that the decision will be made by the board. "If the board approves it, it's irreversible," he explained. In his opinion, it's irrelevant who initiated the sale talks between Sabadell and Santander.

"This operation increases Sabadell's value," said González-Bueno

Meanwhile, BBVA is preparing the final takeover bid document to submit it to the National Securities Market Commission (CNMV). From that point, the CNMV will take approximately three weeks to approve it and begin the takeover acceptance period. This process could begin a few days before Sabadell's extraordinary general meeting on August 6. As the CNMV explained last week, BBVA can submit a takeover bid supplement to include any impact from the sale of TSB. However, it cannot reduce the offer due to the dividend to be distributed. It is only automatically reduced when the dividend is actually distributed, not when it is announced.

Yesterday, from Seville, Economy Minister Carlos Cuerpo called for "respect and prudence" regarding the takeover bid launched by BBVA at a time when private players "are still trying to make a decision." Asked during a meeting with the media during the 4th UN Conference on Financing for Development about Banco Sabadell's decision to sell its British subsidiary TBS to Santander, he insisted that the government's participation in the takeover ended with its authorization.