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Sabadell seeks alternatives harassed by downward pressure from Samlyn Capital


Sabadell Bank seeks strategic alternatives after break with BBVA beset by downward pressure from Samlyn capital. The US speculative firm has raised its short position on the bank chaired by Josep Oliu up to 1.79% from the previous 1.65%, according to the latest data communicated to the National Securities Market Commission (CNMV).

It so happens that Samlyn was the firm that had the greatest bearish position on popular Bank at the time of its resolution, with 1.8% of the capital, so your bet against Sabadell is a alarm signal important to the market.

The entity is publicly traded at 0.37 euros per share, above its annual and historical minimum of 0.25 euros per title but a long way from its annual peak of 1.03 euros marked before the pandemic. On October 27, when Samlyn reported a short of 1.14%, Sabadell was trading at 0.27 euros per share, so the hedge fund anticipates further declines for its shares.

Therefore, Sabadell has had a uncomfortable travel companion at a time when he tries by all means to demonstrate to the market that you can go it alone and generate value for your shareholders, something that analysts like those of Bankinter.

According to these experts, after not accepting BBVA's offer because it was considered insufficient, now Sabadell "will have to look for new alternatives in a market where there are already very few potential candidates for integration. "In this sense, the 'orange bank' considers "unlikely" that Sabadell can continue alone, which "detracts from" the strategic plan you may present.

Market doubts about Sabadell's solo future are the main slab for its actions. The entity seeks buyers for its subsidiary TSB in UK, which has only given him problems since he bought it in 2015. And he prepares a strategic plan for focus on Spain, which includes further cutting its staff and its office network and betting on digitization.

But analysts doubt that these measures, alone, can boost their actions. Some days ago, JPMorgan cut his advice down to 'neutral' to discount the break with BBVA and established a valuation of € 0.35 per title.

Regarding TSB, the American bank analysts added that "the market generally values ​​the value of the business close to zero", and they recalled that Sabadell bought the bank for 2,350 million euros in 2015, while its current book value does not exceed 1.7 billion.

According to their calculations, TSB's equilibrium price is 300 million euros, when applying a ratio of 0.2 times its book value, compared to the 800-1,000 million that Sabadell aspires to achieve.

For their part, the analysts of Barclays have kept their advice of 'neutral', with a valuation of € 0.40 per title. Your TSB rating ranges from 150 and 850 million euros, although they consider a sale "unlikely" in the short term, while the uncertainty about Brexit continues.

"We believe that it is unlikely that Sabadell will be able to sell TSB at a price that will strengthen its capital ratios, which means that, from a solvency point of view, this could limit future dividend payments, "they say.

Thus, Sabadell continues to face a complicated short-term future, made even more difficult by the uncomfortable accompaniment of bearish and speculative investors such as Samlyn capital.

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