Sabadell’s CEO believes BBVA’s buyout remedies fall short

Head of Sabadell (SABE.MC), a Spanish company, opens new tab On Monday, Cesar Gonzalez-Bueno stated that BBVA’s (BBVA.MC) suggested remedies in its takeover offer were inadequate to meet concerns about competition.
In its fight against a hostile takeover attempt by a bigger rival, Sabadell, a Spanish bank, increased its payment policy to 3.3 billion euros ($3.43 billion) on Friday in an effort to persuade shareholders that the bank should remain independent.
Gonzalez-Bueno told Spanish network TVE that “the remedies that the BBVA is proposing are totally insufficient.”
A company’s so-called remedies are the actions it commits to do in order to mitigate the negative effects of a merger on other businesses, consumers, and vendors.

The acquisition is currently being reviewed by the Spanish government in a more extensive phase 2 antitrust examination; Sabadell has turned down BBVA’s full-share offer of 12 billion euros, claiming that it grossly underestimates the bank’s future growth prospects.
On Monday, Gonzalez-Bueno expressed his optimism that the Spanish government and antitrust agency CNMC “will truly defend the interests not only of the shareholders but of course of all the SMEs (small and mid-sized companies) in Spain” in a next stage.
While the Spanish government may not be able to prevent Sabadell shareholders from exchanging their shares for BBVA’s, it can prevent a complete merger.

Carlos Torres, chairman of BBVA, stated at a news conference last month that he did not “contemplate any scenario with a veto from the government,” and that he anticipated the deal’s approval in the next weeks with “acceptable remedies” for the full merger to occur.
To address competition concerns, BBVA has pledged to keep commercial terms for people and SMEs in places where there are fewer than four financial institutions and not close branches when there is no local alternative within a 300-meter (984-foot) radius.