The thrashing by Sabadell's top brass puts pressure on Torres' summer and BBVA's takeover bid.

Banco Sabadell chairman Josep Oliu put on new glasses with modern, dark-framed frames to attend the extraordinary shareholders' meeting this Wednesday in Sabadell, where the sale of the British subsidiary TSB to Banco Santander was being discussed, along with the subsequent distribution of a €2.5 billion dividend. After a while, Oliu reached for his usual glasses, with large lenses and fine gold frames. It wasn't because he couldn't see the clear result of the vote: 99.6% support for the decision to sell, taken by him and CEO César González-Bueno.

This time, getting the prediction right was a low-risk bet , because shareholder approval was a given, given that the sale of TSB strengthens Sabadell's defense against a hostile takeover. The question mark hangs over BBVA and its short-term intentions. On paper, problems are growing for the bank headed by Carlos Torres, but the entity shows no signs of giving up on its particular summer of blue.

Sabadell disassociates the massive shareholder support for the sale of TSB from the possible outcome of a vote by those same shareholders on a takeover bid formalized by BBVA, but the endorsement of the strategy set by the Catalan bank's management is revealing. Following the outcome of this Wednesday's extraordinary meeting, satisfaction was perceptible among Sabadell executives. Oliu and González-Bueno are going on vacation feeling like they've done their homework and are waiting to see how BBVA reacts.

The dilemma lies in whether to proceed with the takeover bid plan or whether it's more advisable to throw in the towel. A withdrawal in the middle of August, with the media spotlight already languishing, could make it easier to digest a withdrawal by BBVA. The bank's CEO, Onur Genç, was terse last week in dispelling doubts about a possible withdrawal. "There are no guarantees of anything," he said. Another possibility is to raise the financial offer to entice Sabadell shareholders , but Genç himself has flatly denied this: "The offer is the offer. We've said it multiple times." BBVA is offering one treasury share and €0.70 in back dividends for every 5.3456 Sabadell shares.

Sources familiar with the takeover bid process indicate that, by sticking to the offer, BBVA is essentially signing away the takeover bid, because Sabadell shareholders will not accept a negative premium (earning less by selling than by remaining as is). However, the same sources suggest that this strategy could serve BBVA executives to absolve themselves of responsibility and claim that, ultimately, it was Sabadell shareholders who scuppered the transaction.

However, the risk for Carlos Torres' team increases if, contrary to everything maintained so far, they raise the offer to buy Sabadell. A suicidal offer could alter the stock price and the value of the BBVA brand without, furthermore, having any guarantee that Sabadell shareholders would accept the better price.

For its part, freed from its British subsidiary, the Catalan bank intends to focus on its business in Spain and on the goal of gaining ground on Santander, BBVA, and Caixabank. The strategic plan sets a profit target of €1.6 billion by 2027. This would represent almost €300 million more than in 2023, when it recorded the second-best year in its history. A couple of weeks ago, Sabadell announced that between January and June of this year it increased profits by 23%, to €975 million, an outstanding first half of the year and unprecedented in its history.

Sabadell's defense during the takeover bid soap opera, almost 15 months into the process, has mixed numbers and letters. The massive dividend promised by the bank to its shareholders for the sale of TSB will go down in history as one of the largest disbursements made by Spanish listed companies to their investors. The bank plans to distribute an extraordinary amount of 2.573 billion to its shareholders. An amount that ranks among the ten largest in the history of the Spanish stock market. To the attractiveness of the figures, the bank's top management has sought to add the epic nature of the story. Public messages have been repeated to appeal to Sabadell's deep roots and to present the bank to the Spanish public as one of our own. In contrast, they have insisted on pointing out that BBVA has a significant portion of its business in Türkiye and Mexico.

The call to action has been maximised in Catalonia - "of the Spanish banks, we are the Catalans," Oliu has even asserted - and coinciding with the popular Sant Jordi festival, a powerful marketing campaign was launched that didn't mince words and called for "defeating the dragon."

The move to return the company's headquarters to Catalonia, after almost eight years in Alicante, was also interpreted as a maneuver by the bank's management to gain the complicity of the Generalitat (Catalan government), led by Socialist Salvador Illa, one of Prime Minister Pedro Sánchez's close confidants . This August, the two plan to share a vacation on the island of Lanzarote.