The attempt to buy Liberbank by Abanca will go down in history due to the complexity of the process. Sources of Abanca comment that their intention was not to make a takeover and much less a hostile takeover. In his opinion, they did not follow the formal procedure of a takeover bid because it requires some steps - such as making a formal offer to the board - that would have interfered in the merger between Liberbank and Unicaja.
From the Galician entity maintain that almost three months ago they approached the main shareholders of Liberbank with discretion and confidentiality, proof of their good faith. They point out that they went ahead in the writing of the offer after checking the receptivity. "Neither was an OPA nor did we want it to be hostile," they say. They even remember that they established some rules so that, unless great surprises appeared in the books, the price of 0.56 euros per share could not be reduced.
The fact is that Abanca has decided not to go ahead with the offer by Liberbank, announced last Friday. The entity chaired by Juan Carlos Escotet has taken this decision after the CNMV gave him a "non-extendable" term of ten working days to express his decision or not to formulate a takeover bid on Liberbank. Abanca had asked for three weeks to study the accounts, so he considered it impossible to continue in these conditions. The Stock Exchange received the news with sharp drops in Liberbank, of 9.66%, and Unicaja, of 2.35%.
Between the 22nd and the 26th of February, Abanca, from what was Novacaixa Galicia, and Liberbank, (resulting from the union of the old boxes of Asturias, Cantabria and Extremadura), have lived frantic days, pending the comments of the National Securities Market Commission (CNMV). On Friday, February 22, the Galician entity announced that it had contacted "the main shareholders of Liberbank" to convey their firm interest "in promoting a corporate operation that we believe would be very beneficial". However, that same day, the Liberbank board told the CNMV that it had not received any offers or was in talks "to carry out any strategic operations other than the merger with Unicaja.
Market sources have been surprised by these two divergent situations: some said they had spoken with important shareholders and others who had not even started conversations. The shareholders of Liberbank are no more than half a dozen. The fact is that Abanca deepened in its dealings until reaching a principle of agreement in the price: 0.56 euros per share, paid in cash except for 25% of the capital, which is controlled by the banking foundations of the old boxes, which It would be through an exchange of actions. Liberbank closed yesterday at 0.42 euros on the Stock Exchange.
On Monday 25, Liberbank insisted that the council had decided "unanimously" to continue with the Unicaja operation. This situation leads one to think that throughout these days, the positions of some shareholders of the Asturian entity have changed, to the point of putting an end to the bid attempt.
Menendez ends the offer
Market sources are surprised by the fact that Abanca has been able to deepen an agreement "with the main shareholders" without having the support of Liberbank's chief executive, Manuel Menéndez. What seems clear is that Menéndez has ended by stopping Abanca. Now Liberbank continues its negotiation with Unicaja (they have been debating the details for almost five months), a project in which Menéndez will have an executive position.
Another of the controversial issues has been that Abanca demanded that Liberbank show him his confidential balance sheets to give a definitive price. The Galician bank said that they reached 0.56 euros per title "with public information, making it necessary to carry out a confirmatory review (due diligence) of certain aspects of Liberbank." The attitude of the Asturian bank denotes that he was not willing to teach his books. Even if the CNMV had asked for it, as Sebastián Albella, its president, has said. "We are in favor of that when there are offers raised, seriously and in good faith, the companies allow the due diligence. The decision is exclusively yours, but I do not want any misunderstanding in the sense that we had any criteria contrary to the decision of Liberbank would have been to facilitate access to the review of documentation "explained this Tuesday. CNMV sources insist on the right of the person who launches the bid to know the information of the opado in detail, but they also point out that Abanca did not comply with the regulated bidding procedure when giving a price per share without having completed the previous steps.
Liberbank could believe that if Abanca asked to see his books and then lowered the 0.56 euros, the message to the market would have been very negative. However, to avoid this situation, sources close to Abanca indicate that they undertook not to vary the price, unless there were major accounting problems.
Another of the natural resistances to show the balance is that the buyer sees your situation in detail, but the buyer does not know yours. Also in this case, Abanca established that EY would make a due diligence of its entity that would deliver it to Liberbank when it provided its own, made by PwC. That is, there was information reciprocity, since the banking foundations were going to receive shares of Abanca. Now the ball is on the roof of Menéndez: it must offer an agreement with Unicaja better for its shareholders than that of Abanca. In his council feel some aggressive funds (hedge fund), such as Oceanwood, pending the return on their investment. However, Unicaja has taken more strength in the merger because it is now the only option for Liberbank, an entity called to merge. Maybe the game is not over and more offers arrive.