BBVA welcomes the discontinuation of the merger negotiations between Liberbank and Unicaja Banco due to the lack of agreement between the two entities on shareholder participation and considers it preferable not to have a bad deal.
BBVA, in a report of its corporate banking and investment division, claims that the merger failure is "good news for Liberbank" in light of Unicaja Banco's requirements, which require 60% of the new group.
This allocation will leave Liberbank 40% and, according to BBVA, does not reflect its "superiority" as it believes that the Bank of Asturian origin should have up to 49% of the new group and Unicaja Banco 51%.
The report protects that the merger has made sense, but if it was not possible, it believes that in the long run, these small banks should continue with corporate operations to get a size or buy from larger banks.
BBVA does not exclude that Liberbank and Unicaja Banco are looking for other agreements with small banks, and even ask whether this may be the second opportunity for Abanca, who is interested in Liberbank in full merger negotiations with Unicaja Banco.
For his part, another Citi report praises the leadership of Liberbank's cost-cutting and balance-sheet management team and also concludes that the company is "in a good place" and shows its preference for this entity against Unicaja Banco.
According to him, if the Liberbank merger were to take place, he had to have a 42% stake in the new group and 58% in Unicaja Banco, which is below 60%, which he believes is required.
Citi adds that Spain needs more mergers, arguing that the deterioration of the economy is more likely to restore corporate operations and reveals that it is carefully looking for whether Abanca or another entity is interested in Liberbank.