There is high market volatility amid the coronavirus crisis. That is why the Spanish National Securities market commission (CNMV), after the Government approval, has allowed Six Group’s to make a public takeover offer on the Spanish Stock Exchanges and Markets (BME).
The owner of the Zurich stock exchange. Therefore, has had the indispensable consent to make his purchase proposal, which he made before the coronavirus crisis, in November 2019, on the stocks of Madrid, Barcelona, Valencia and Bilbao.
The approval of this transaction, already after the COVID-19, has been given because once the situation has been assessed is considered to meet the requirements regarding financial solvency.
It worth noting that the first to be surprised by this news was the grupo Six. As they expected the confirmation to be given months after due to this unprecedent situation due to the COVID-19.
Just 24 hours later the Government gave its approval, the Government and the CNMV have caused a surprised on the market, since they left aside Euronext. That is because that stock wanted to take control over the BME. In line with that intention, it observed the evolution of the Spanish trader in order to make a takeover bid.
The Managing Director from the Six said: “we are quite pleased we have received the authorization from the CNMV. This is a time of great economic uncertainty, our offer will allow a formation of a strong and dynamic group, with new growth opportunities”.
The Swiss group has assured that it will keep its operations on the Spanish Stock Exchange for at least 10 years, according to the Boletín Oficial del Estado (Official State Gazette). Even though 4 years hand been agreed at first. This decision would only change in case there was a modification in the business or in the economic conditions. In addition, Six has commented that its idea is to leave indefinitely, headquarters, management and substantial operational capacity.
It should be worth noting that if the conditions were met and the percentage of shares took place, in the possession of non-significant shareholders after the takeover bid was less than 5%, i.e. that the free-limited capital remaining on the market was less than that percentage, Six group could exercise its right of forced sale.
The offer is over 100% of the capital of the BME, offering a price of €33.4 for each of its share. This is made up of about 84,000,000 shares of which Six has none in its possession. The deadline for approval is 43 calendar days from the trading business day following the date of publication of the first announcement with the essential data of the offer.
After the deadline, the governing companies of the Spanish stock exchanges will have one week to report the result of the offer in the terms and at the session indicated by the CNMV. Subsequently, The BBVA will be responsible for making the intermediation and settlement processes regarding to shares acquisition.
Concerning the employees, the company intends to remain the same conditions regarding the number of employees and their working conditions, at least during the first years. After this period, Six plans to conduct a review to avoid false results and hence, to achieve a maximum operational efficiency. In addition to make equal the BME’s human resources policy or the Six variable remuneration plans.
It is also important to notice that Six’s offer is subject to the (renounceable) condition at a minimum acceptance level of 41.8 million shares, which is at least 50% of the BME’s capital plus one share. To provide a guarantee, Six has submitted guarantees worth €2,7 billion. The main guarantors, who are large shareholders of Six, are Credit Suisse (558 million) and UBS (1,117 million). Although it is also guaranteed by theBBVA bank (167), Santander bank (167) and Kutxabank (167).
With all this, the shareholders of BME have to decide between these alternatives: sell at this time at market price, keep the bid of €33.4 per share, wait in case there is a Euronext counteroffer or as a last option, not to sell and keep the shares.
In addition, Dijsselhof, from Six group noted, encouraging shareholders voluntarily in the bid: “We have presented an attractive offer to BME shareholders with a price that reflects the company’s value and everything in cash. This is an excellent opportunity for shareholders to get an attractive price completely in cash for their shares.”