BBVA & Sabadell: The Complex Road to Merger
On 24 May, BBVA officially presented its hostile takeover bid for Banco Sabadell, with the intention of taking control of the bank and proceeding with its merger. To launch the takeover bid, BBVA needs the authorisation of the National Securities Market Commission (CNMV), as well as the European Central Bank (ECB) and the National Markets and Competition Commission (CNMC). According to Alfonso de Marcos, a partner at Freshfields Bruckhaus Deringer specialising in capital markets, this process is expected to be long and complex. Following the news that has shaken the Spanish banking sector, Iberian Lawyer spoke to him about the prospects and risks associated with unsolicited takeover bids in the banking sector.
by mercedes galán
To set the context, what is a hostile takeover bid and when does it happen?
It is important to note that the term “hostile takeover bid” is not a legal definition used in our legal system, being more of an informal term used in the market environment. Perhaps it would be more accurate to use the term “unsolicited takeover bid”. This term refers to a bid in which the offeror has not previously approached, agreed or negotiated the terms of the bid with the offeree company. It is a surprise move. However, as it is not a legal concept, it does not entail specific regulatory consequences from a legal point of view.
The launch of such a takeover bid cannot be withdrawn under the law. What is the process for a hostile takeover bid?
In general, takeover bids cannot be withdrawn once they have been launched, except in certain legally specified circumstances.
The process for a takeover bid, whether solicited or unsolicited, involves first submitting the announcement, as BBVA has already done, stating the terms of the bid. From there, approval of the corresponding explanatory prospectus of the bid by the Comisión Nacional del Mercado de Valores (CNMV) is required. Once this is obtained, an acceptance period begins in which shareholders can decide whether or not to accept the offer. Although it seems straightforward, the process can be complicated by a number of factors, such as competing bids or delays in obtaining certain administrative authorisations.
In regards to the news that has shaken the Spanish banking market, what do you think has motivated BBVA to make this takeover bid at this time?
