The attempt to buy Liberbank by Abanca will go down in history due to the complexity of the process. Abanca sources say that their intention was not to make a purchase, much less a hostile purchase. In their 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, which would interfere with the merger between Liberbank and Unicaja.
The Galician entity maintains that nearly three months ago they approached Liberbank's main shareholders with discretion and confidentiality, proving their good faith. They point out that they have gone ahead in the wording of the offer after verifying the receptivity. "It was not a PRA and we did not want it to be hostile," they say. They even remember that they established some rules so that, if there were no great surprises in the books, the price of 0.56 euros per share could not be reduced.
The case is that Abanca decided not to move forward with Liberbank's offer, announced last Friday. The entity chaired by Juan Carlos Escotet made this decision after the CNMV gave it a period of ten working days not extensible to express its decision or not to make a public takeover offer in Liberbank. Abanca requested three weeks to study the accounts, so it considered it impossible to continue these conditions. The Stock Exchange received news with pronounced falls in Liberbank, 9.66% and Unicaja, of 2.35%.
Between 22 and 26 February, Abanca, which were Novacaixa Galicia and Liberbank, (result of the union of the old boxes of Asturias, Cantabria and Extremadura), lived frantic days, until the comments of the National Stock 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, on that same day, the Liberbank board told the CNMV that it had not received any offers or was in negotiations "to carry out strategic operations other than the merger with Unicaja.
Market sources were surprised by these two divergent situations: some said they talked with important shareholders and others that have not yet started talks. The shareholders of Liberbank are not more than half dozen. The fact is that Abanca has deepened in its business until reaching a principle of agreement in the price: 0.56 euros per share, payments in cash except 25% of the capital, that is controlled by the foundations of banks of the old boxes, which would be through an exchange of actions. Liberbank closed yesterday at 0.42 euros in the stock market.
On Monday 25, Liberbank insisted that the council decided "unanimously" to continue with the Unicaja operation. This situation leads us to believe that over these days the positions of some shareholders of the Asturian entity have changed, to the point of ending the bidding attempt.
Menendez ends the offer
The market sources are surprised by the fact that Abanca could deepen an agreement "with the main shareholders" without the support of the executive president of Liberbank, Manuel Menéndez. What seems clear is that Menéndez ended Abanca. Now Liberbank continues its negotiation with Unicaja (they have been discussing the details for almost five months), a project in which Menéndez will have an executive position.
Another controversial issue was that Abanca demanded that Liberbank show his confidential balance sheets to give a definitive price. The Galician bank said that they reached 0.56 euros per title "with public information, so it is necessary to make a confirmatory review (diligence) of certain aspects of Liberbank." The attitude of the Asturian bank indicates that he was not willing to teach his books. Even if the CNMV had asked for it, as said Sebastián Albella, its president. "We are in favor of that when there are proposals raised, serious and in good faith, the companies allow 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 be to facilitate access to review the documentation, "explained this Tuesday. The sources of the CNMV insist on the right of the person who launches the offer to know the information of the investor in detail, but also indicate that Abanca did not comply with the tender procedure when granting a price per share without having completed the previous steps.
Liberbank could believe that if Abanca asked to see his books and lowered the 0.56 euros, the message to the market would be very negative. However, to avoid this situation, the sources close to Abanca indicate that they committed to not vary the price, unless there were important accounting problems.
Another of the natural resistance to show the balance is that the buyer sees his situation in details, but the buyer does not know his. Also in this case, Abanca established that EY would perform the due diligence of its entity that would deliver it to Liberbank when it was its own, made by PwC. That is, there was reciprocal information, since bank foundations would receive shares from 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 their board they hear some aggressive funds (hedge fund), like Oceanwood, waiting for the return of their investment. However, Unicaja took more force in the merger because now it is the only option for Liberbank, an entity called to merge. Maybe the game does not end and the more bid arrives.