The adjustment made by the BBVA at the price of takeover bid about Sabadell Bank to collect payment dividends of both banks not only does it not improve the conditions of the offer for the shareholders of the Catalan bank, but it makes them worse and, therefore, increases the probability of its failure.
The bank he presides Carlos Torres announced this Tuesday that it is changing the conditions of the offer to adjust them to the payment of the dividend made this Tuesday by Sabadell, as well as the shareholder remuneration that BBVA will pay on October 10.
In this way, the initial equation of one new BBVA share for each 4.83 Sabadell becomes one more new action 0.29 euros in cash for each 5.0196 of the bank he presides Josep Oliuwhich correspond to the dividend also announced yesterday by the bank of Basque origin.
At BBVA’s Tuesday closing price in Bag9.30 euros, the original takeover equation valued Sabadell at 9.30/4.83 = 1.9255 euros per share. With the new formula (taking the same close of 9.30 euros), the valuation would be (9.30+0.29)/5.0196 = 1.9105. That is, 0.015 euros less for each Sabadell title.
And that, taking into account that those 0.29 euros in cash are gross, that is, you have to practice the corresponding retention of Tax authorities that leaves the amount net of the dividend in 0.2349 euros per share. If we apply the same formula to the net dividend, it would come out (9.30+0.2349)/5.0196=1.8995 euros for each Sabadell title.
As OKDIARIO announced at the time, institutional shareholders -funds investment– from BBVA have refused to allow Torres to improve the price of the takeover bid over Sabadell, which is why Torres has always maintained that he has no room to do so. Now, it has chosen to pay the part of the dividend in cash (these funds were also opposed to this), but in exchange for lowering the total price, as just explained.
