BBVA improves by 23% the price offered to buy the 50.15% that it does not control of its subsidiary Garanti , but it will save up to 264 million euros if it achieves maximum adhesion thanks to the collapse of the Turkish lira.
His proposal seeks to secure the success of the public offer for the acquisition of shares (takeover bid) in discount time, since the adhesion period for investors expired next Friday the 29th and will now be extended for two extra weeks due to the application of Turkish regulations. , until May 18.
It will also be his last move because the same regulations only allow the price to be raised on a single occasion and it does so when some international funds had claimed to increase the heel because the collapse of the lira had left BBVA’s approach unattractive.
In local currency, the group led by Carlos Torres increased the price offered last November by 22.95% when it announced its desire to strengthen itself in Garanti in order to claim a higher profit from the subsidiary from which the group already accounts for all its risks.
BBVA controls 49.85% of the bank, so that if 50.15% of the capital to which the offer directs goes , it will pay 31,595 million liras compared to the 25,697 million that it assumed with the original price.
The value of the lira has fallen by almost 40% since then. BBVA itself collects in its information on the operation that the exchange used to calculate its valuation has gone from 11.43 liras per euro to 15.91. Translated into euros, it means that if all the shareholders attend, they will pay up to 1,985 million compared to the 2,249 million encrypted in November and it means saving a maximum of 264 million.
In addition, its impact on capital is reduced and the operation will drain 34 basis points in the maximum quality capital CET 1 ‘fully loaded’ compared to the maximum 46 -if all the shareholders sold- estimated in the original takeover bid. It is diluted less due to the depreciation of the currency and because it takes into account the balances of last March with a more capitalized Garanti.
Despite these maximum figures, the banking group has conditioned success on exceeding the 50% threshold, which would suffice for the owners of just 0.15% of Garanti’s capital to accept its offer.
The reason is that the Turkish regulation frees hands after taking control, so that BBVA could make subsequent purchases of shares of the Turkish bank at any time and without the need to formulate new takeover bids.
The bet was picked up in November with a fall in the price of BBVA and today it is accompanied again with decreases in the price. Given the doubts that the operation raises due to the volatility of the Turkish market and the uncertainties that the impact of the war in Russia has added, the bank has defended its potential for growth and banking.
BBVA advanced that if it controls 100% of the Turkish bank, its benefit could improve its account by 14%, simply with the total imputation of the result. In the short term, the entity is not renting its full potential because the Turkish regulator has limited the delivery of dividends to 10% so that the national bank capitalizes in the face of the country’s uncertainties.