Bourse battering leaves Banco Sabadell exposed to takeover
The sharp drop in Banco Sabdell's share price since the start of this year has made the Spanish medium-sized bank an attractive takeover target.25 January 2008
BARCELONA - The sharp drop in Banco Sabdell's share price since the start of this year has made the Spanish medium-sized bank an attractive takeover target, Chairman Josep Oliu said yesterday.
"There has been a very big correction and the share price is very attractive," Oliu said at a presentation of Sabadell's results for 2007.
"With the drop in the stock market, we have much less protection against a possible takeover," he added.
Oliu said the risk of a takeover was much more "worrying" than the bank's liquidity situation in the current credit crunch. "The liquidity situation is absolutely buoyant. We are lenders in the interbank market and we have EUR 10 billion of liquidity available in European Central Bank assets, which we are not going to need," he said.
Sabadell posted a net profit last year of EUR 782.34 billion, down 13.9 percent on 2006 due to the absence of extraordinary gains. Sabadell sold its real estate unit Landscape to Astroc for EUR 990 million in 2006, which helped posted earnings that year to EUR 908 million. Recurrent earnings in 2007 were up 37.4 percent.
Oliu said Sabadell is close to striking a tie-up with Italian lender Unicredito, which owns 4 percent of Sabadell, to act as its correspondent bank in Eastern Europe.
[Copyright EL PAÍS / S. DEL ARCO 2008]
Subject: Spanish news