Asset managers are skeptical: "BBVA's improved offer adds little to the deal."

BBVA has finally loosened its portfolio to improve its takeover offer for Sabadell. The new exchange offer represents a 10% increase in the price it is willing to pay for its rival, valuing it at almost €20 billion. But, for many professional investors, this increase is not enough to tip the balance and convince undecided retail investors. Pedro del Pozo is the director of financial investments at Mutualidad—an institution that manages assets worth €11 billion. Although the company's portfolios still include shares in both Sabadell and BBVA, the financier acknowledges that they have been "significantly reducing the weight of bank shares in recent months, taking advantage of the strong appreciation."

For this institutional investor, "the improved offer adds very little to the transaction." In his opinion, it is an "almost cosmetic" increase, which BBVA was forced to make after months of posting a purchase offer below the market price of Sabadell shares. "Honestly, I don't think this improvement will spark much interest from retailers," he concludes.

This opinion is shared by several fund managers and institutional investors consulted. The proposal to pay 10% more is unlikely to be enough to tip the balance and allow BBVA to obtain more than 50% of Sabadell's shares. However, the bank chaired by Carlos Torres reserves the right to waive this acceptance threshold and settle for a stake between 30% and 50%.

Various sources consulted expected BBVA's offer increase of "at least 15%," which would give the hostile takeover a better chance of success. "The entire market was waiting for the offer increase; we took it for granted, but the amount offered was quite disappointing," notes a fund manager at an independent Spanish firm.

For now, this negative reaction has materialized on the stock market with a devaluation of the shares of the two entities involved . "These transactions generate a lot of noise and uncertainty, over months and months, and investors eventually lose patience," explains an investor at one of the major Spanish insurance companies. Although takeover bids always generate value on paper, the execution risk is high, and there are many examples that this is not always the case . The devil is often in the details.

Sabadell's board will meet in the coming days to issue a new recommendation, and it is likely to maintain its rejection of the transaction. "We expect them to continue opposing BBVA's offer, considering it undervalues ​​the Catalan bank," says Gustavo Martínez, finance professor at Francisco Marroquín University and market analyst.

One of the few trump cards BBVA executives have is David Martínez Guzmán, Sabadell's Mexican shareholder , who was the only director who did not outright oppose the takeover proposal, but simply demanded more money. It now remains to be seen whether a 10% increase is enough to force him to agree to sell the 3.9% stake he controls in the Spanish bank. The rest of the major shareholders will be tougher to beat. The insurance company Zurich, with a 4.5% stake, has an insurance policy distribution agreement with Sabadell, which it would have to terminate if the BBVA takeover proposal were to prosper, given that the latter already has a powerful partnership with the German company Allianz.

Nor can we count on the fact that more than 10% of the share capital is held by passive investment funds , which track the performance of the indices that include Sabadell. Only if the takeover bid is successful and the bank is removed from these stock indexes would they have to sell their shares in the Vallés-based company.