CNMV indicates that there may be no gap with Competition in the authorization of the takeover bid of BBVA and Sabadell

The takeover law allows the CNMV to approve the offer even if the competition authorities have not issued a statement.

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The president of the National Securities Market Commission (CNMV), Rodrigo Buenaventura, has defended that “in practice” his organization has authorized the last 24 takeover bids already knowing the Competition criterion and has indicated that there may not be a gap between the authorization of the CNMC and the launch of the hostile takeover bid that BBVA wants to launch on Banco Sabadell.

“In the last 24 takeover bids, investors have operated knowing the Competition criteria. I cannot assume that there will be a gap when, in practice, the gap has been zero,” he defended in his speech at the economic course organized by the Association of Economic Information Journalists (APIE) and the Menéndez Pelayo International University (UIMP) in Santander (Cantabria).

Thus, he has insisted that “in practice” the CNMV and CNMC authorizations have been granted simultaneously and has pointed out that, in the case of the BBVA and Sabadell takeover bid, there is a “real possibility” of it happening, although has stated that “it will logically depend on the specific steps” that Competition takes and how this OPA evolves specifically.

This operation is made up of two parts: on the one hand, the hostile takeover bid directed at Sabadell shareholders – after the board of the Catalan entity rejected the merger proposal – to acquire 100% of the capital; on the other, the merger between both entities to create the second largest bank in Spain.

To launch the takeover bid, BBVA needs authorization from the European Central Bank (ECB), which monitors the solvency of the resulting entity and that the operation does not affect the stability of the financial system, and from the National Securities Market Commission (CNMV). , which will analyze that the information contained in the brochure is in accordance with the legislation.

Likewise, the effectiveness of the takeover bid is subject to the attendance of at least 50.01% of Sabadell shareholders, the approval by the BBVA board of the capital increase to carry out the share exchange, authorization from the CNMC and the Prudential Regulation Authority (PRA) of the United Kingdom.

This implies that BBVA does not need prior authorization from the CNMC to launch the takeover bid, but rather to achieve its effectiveness, which opens a scenario where the bank can launch the operation on the market without knowing whether or not Competition sets conditions and what they would be.

Thus, the president of the CNMV has explained that the takeover law allows the CNMV to approve the offer, even if the competition authorities have not commented, which has included not only the Spanish supervisor, but also those of other European countries or third countries. In the case of BBVA, the offer is conditional on the British prudential authority or the authorization of supervisors in France and Morocco, for example.

However, Buenaventura has pointed out that “in practice”, the CNMV has authorized the last 24 takeover bids after the competition authorities ruled, also taking into account that it is the offeror itself – which in this case would be BBVA – the person interested in having this authorization to give certainty to what happens. This is the “ideal situation” when there are important authorizations.

BBVA MUST INCLUDE THE SYNERGIES IN THE PROSPECTUS IF THERE IS NO MERGER

Buenaventura has also stated that BBVA must include in the takeover prospectus the possibility that the merger with Sabadell does not take place and the synergies that would occur in such a case. This is already included in the OPA law, which details the content that must be included in this document.

For example, the law states that the issue of Competition authorization must be included in the transaction document; The annex indicates that the prospectus must contain the possibility, or not, that the takeover bid is conditioned by the Law on Defense of Competition, indicating “possible actions that the entity intends or should initiate”, as well as “the possible consequences “.

BBVA must also detail the authorizations or administrative verifications, other than those of the CNMV, obtained prior to the formulation of the OPA and the agreements or pacts “of any nature” with the shareholders, members of the board and management of Sabadell, if there are any.

‘CENYT CASE’

On the possibility that BBVA includes in the takeover prospectus the reputational risk that the request for indictment by the judge of the BBVA National Court – and the former president of the bank, Francisco González – could generate in the ‘Cenyt case ‘, Buenaventura has recalled that these risks have to be included in the brochures and that for a few years his organization has been recommending that boards of directors reinforce the mechanisms that they must follow in cases like these when procedural changes occur in matters that affect them.

“This recommendation is widely followed by companies and I have no doubt that BBVA will follow it,” he noted.

In fact, as part of the obligation to include risks in its brochures, it has indicated that BBVA has updated its single registration document this week to include the request of the Anti-Corruption Prosecutor’s Office to charge Commissioner Villarejo, González and other former executives of the BBVA for the assignments to the former police officer.

However, he has pointed out that in the specific case of the takeover prospectus, when the offer is made through an exchange of shares, the document does not have to contain all the information on all the risks, since there are others available. of investors, such as the single registration document.