The big funds play more than 6,000 million in the merger dance | Markets

The bank consolidation process is gaining momentum in Spain. Two months after CaixaBank and Bankia agreed on their integration, now all eyes are on BBVA and Sabadell, which last Monday confirmed that they are holding advanced talks to complete their merger. These four entities, all of them members of the Ibex 35, are joined by Liberbank and Unicaja, which at the beginning of October resumed negotiations to complete the failed 2019 merger operation.

Corporate movements are a reflection of a particularly difficult time for banking. The crisis unleashed by the pandemic has been strongly felt in the accounts as well as in the evolution of the entities on the stock market, which despite the recovery in recent sessions, continue to trade at heavy discounts. Investors are waiting to know the terms of the offers to decide whether to accept the exchange and become part of the resulting entity or if, on the contrary, they cash in and sell their participation. It is a process faced by both retailers and large investors. Within this last group, the large management companies stand out which, according to data from Bloomberg and the CNMV, hold stakes in the six entities in the process of merger with a market price of 6.043 million.

BlackRock is one of the most present management companies in Spanish banking. Its participation in the capital of the entities goes beyond the protagonists of the mergers (it owns 5.426% of Santander and 5.17% of Bankinter), but it is BBVA that it bets the most. Its weight in the capital of the entity exceeds 5.9%, a percentage that makes it the main owner of an entity without major shareholders of reference and that at market prices is valued at 1,384.8 million. In Sabadell, BlackRock holds a representative stake of 3.31% (81.95 million). In recent sessions, the manager has taken advantage of the pull experienced by the entity’s actions to make cash. In just one week, it has gone from 3.381% of the capital registered at the beginning of November to 3.31% today.

The firms Vanguard and Norges Bank are also particularly active in Spanish banking. Vanguard has in its portfolio shares of the eight listed banks and with the latest stock market rises it has strengthened its presence in BBVA (it owns 4.21%, about 985.3 million) and Sabadell (3.66%, about 205.9 millions). Analysts foresee a merger through a share swap, such as that of CaixaBank and Bankia, which would help to preserve solvency to a greater extent at the cost of sacrificing earnings per share. According to Barclays calculations, this earnings per share would grow to 30% after two years in the case of a cash transaction and to 17% if it is executed with a security exchange.

Norges Bank holds similar stakes in all the entities subject to corporate operations. Its weight in the capital of Spanish banks is around 3% with the exception of Bankia, whose presence is limited to 0.59%. In July, it disposed of the Sabadell shares that it had in its portfolio. At market prices, Norges Bank is playing 1,293 million in the financial consolidation process.

Along with these names, others such as Sanders Capital stand out, which landed in the capital of Sabadell in February with the purchase of shares representing 3.47% of the capital (85.9 million). His entry into the shareholding was seen as a balloon of oxygen at a time when the bleeding in the bank’s Stock Market had only begun and today he is the second reference shareholder behind David Martínez Guzmán (3,495 %).

The Oceanwood fund took positions in August due to the concentration process and increased its stake in Liberbank from 17.83% to 18.19%, the highest declared by the venture capital firm to date. It controls 8.18% through shares and 10.019% through financial instruments. At market prices, its participation is valued at 151.8 million euros.


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