Sabadell could double shareholder remuneration this year if it sells TSB

Sabadell could propose doubling its expected shareholder remuneration for this year (€1.3 billion) with the sale of TSB as a lure to convince investors to reject BBVA's hostile takeover bid. This decision could be put to a vote by the board during the takeover bid's acceptance period, which is expected to be next month. The British press speculates that offers for the Sabadell subsidiary could be between 1.7 billion and 2 billion pounds (2.0-2.3 billion euros). In that case, although the transaction would generate losses relative to the bank's book value (2.5 billion euros), the bank would actually generate excess capital of between 1.6 and 2 billion euros, which it could distribute to shareholders. Read also Oliu confirms that Sabadell will call a meeting to validate the sale of TSB if the offer is good. Eduardo Magallón Capital is the money Sabadell has "set aside" to deal with unforeseen events. And yesterday, during the shareholders' meeting, it reiterated its commitment to distribute everything above 13%. The dividend has been the main weapon Sabadell has used since it felt threatened by the hostile takeover bid to try to convince its shareholders. Its argument is that it is more profitable to remain in Sabadell's capital than to leave for BBVA. The CNMV will analyze the viability of this sale movement if it is proposed. Another option for the money "freed up" by the sale of TSB is to use it to make purchases in Spain, as the government is demanding. Pedro Sánchez's administration would like Sabadell to make a move and be able to grow larger through a purchase or merger to avoid new hostile takeover bids in the future. In reality, the sale of TSB makes Sabadell smaller, although it could also be an opportunity to strengthen its presence in Spain. Yesterday, from the bank's operational headquarters in Sant Cugat del Vallès, Sabadell's chairman, Josep Oliu, confirmed that they will call an extraordinary shareholders' meeting to sell TSB if the offer received is favorable. Sources at the CNMV explained yesterday that in that case, they would analyze the feasibility of such a meeting during a takeover bid. For now, they declined to comment on whether it is possible or not. The meeting must be called 30 days in advance, so in the best-case scenario, it wouldn't be held until the middle of next month. Regarding the offers received by Sabadell, Oliu said that "if they are good outside the context of the takeover bid, they are also good in the context of the takeover bid." The chairman added that "we will analyze this with the utmost professionalism, and if the board believes there is an offer for TSB that would generate shareholder value and be worth raising with shareholders, I would then call a general meeting." González-Bueno believes that BBVA will withdraw the takeover bid following the government's decision next Tuesday. Oliu clarified that "this possibility is perfectly compatible with the passive regime to which the bank is subject as a result of the takeover bid." The key for the chairman is that the sale of TSB "genuinely generates value for shareholders relative to its current value." During the meeting, CEO César González-Bueno stated that, in his opinion, BBVA will withdraw the takeover bid after the government imposes its terms on the transaction next Tuesday. Sources consulted said that the Council of Ministers on the 24th (Sant Joan's Day, a public holiday in Catalonia and other regions) will analyze the resolution on the takeover bid prepared by the National Commission on Markets and Competition (CNMC). The CEO emphasized that a reason is required to withdraw a takeover bid, and so far there hasn't been one, as the CNMC's terms were agreed upon and negotiated with BBVA. What the government decides is not.