REG - Banco Bil.Viz.Argent - Voluntary Takeover Bid for Türkiye Garanti Bankasi

Banco Bilbao Vizcaya Argentaria SAAnnouncement

15/11/2021 07:05

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RNS Number : 3646S  Banco Bilbao Vizcaya Argentaria SA  15 November 2021

 

Banco Bilbao Vizcaya Argentaria, S.A. (BBVA), in accordance with the
provisions of the Securities Market legislation, hereby communicates the
following:

INSIDE INFORMATION

The Board of Directors of BBVA decided to launch a voluntary takeover bid for
the entire share capital of Türkiye Garanti Bankası A.Ş. ("Garanti" or the
"Company") not already owned by BBVA.

The main characteristics of the voluntary takeover bid (the "Voluntary
Takeover Bid") are described below. The detailed terms and characteristics of
the Voluntary Takeover Bid will be contained in an information memorandum to
be submitted by BBVA for approval to the Capital Markets Board of Turkey (the
"CMB"). The information memorandum will be published once such aforementioned
approval is obtained.

1.   Bidder: BBVA.

 

2.   Filing of the Voluntary Takeover Bid: In accordance with Section 4 of
the Communiqué on Takeover Bids (Pay Alım Teklifi Tebliği) no. II-26.1 (the
"Communiqué"), BBVA will submit for authorisation an application of the
Voluntary Takeover Bid to the CMB. BBVA expects to submit the application
within the following days.

 

3.   Shares to which the Voluntary Takeover Bid is addressed and
participation of BBVA in Garanti: All references to "shares" or "share" in
this announcement shall be deemed made to lots of 100 shares, which is the
trading unit at Borsa Istanbul.

The share capital of Garanti amounts to an aggregate of 4,200,000,000 shares
with a face value of 1 Turkish Lira each. The Company has no privileged
shares.

As of the date of this announcement, BBVA owns an aggregate of 2,093,700,000
shares which represent 49.85% of the total share capital of the Company.
Consequently, the Voluntary Takeover Bid is addressed to the remaining
2,106,300,000 shares which represent 50.15% of the total share capital of the
Company.

4.   Consideration: The consideration offered by BBVA to each of the
shareholders of the Company is 12.20 Turkish Lira in cash for each share of
the Company (the "Voluntary Takeover Bid Price"). The maximum aggregate amount
of consideration payable by BBVA is 25,697 million Turkish Lira (equivalent to
approximately 2,249 million Euros(( 1 ))) assuming all Garanti's shareholders
sell their shares. BBVA will pay the consideration with its current
shareholders' funds.

BBVA reserves the right to reduce or otherwise modify the Voluntary Takeover
Bid Price by an amount equal to the gross amount of the distribution per
share, if the Company declares or distributes dividends, reserves or any other
kind of distribution to its shareholders at any time from today until the day
of completion of the Voluntary Takeover Bid.

The Voluntary Takeover Bid Price represents a premium of approximately:

(i)         34% of the daily adjusted weighted average prices on the
stock exchange in the 6 months prior to the date of this announcement (9.12
Turkish Lira);

(ii)        24% of the daily adjusted weighted average prices on the
stock exchange in the 30 trading days prior to the date of this announcement
(9.83 Turkish Lira); and

(iii)       15% over the closing price of the shares in the Company on
November, 12, 2021 (10.58 Turkish Lira).

Since the Voluntary Takeover Bid is addressed to all of Garanti's
shareholders, pursuant to article 14 (1) (a) of the Communiqué, if and when
as a result of the Voluntary Takeover Bid, BBVA's shareholding in Garanti
exceeds 50%, BBVA will not be obliged to launch a subsequent mandatory
takeover bid.

5.   Prior approvals: The acquisition by BBVA of more than 50% of Garanti's
total share capital is subject to the prior approval of several authorities,
both in Turkey and in other jurisdictions.

BBVA has received confirmation from the CMB that it will not formally approve
the Voluntary Takeover Bid application until the CMB receives confirmation
from BBVA that all relevant approvals required by BBVA have been duly
obtained. Only after approval by the CMB of the Voluntary Takeover Bid
application will the voluntary takeover bid period begin.

 

BBVA will diligently disclose to the market when all relevant authorisations
are obtained.

 

6.   Conditions: Once all relevant regulatory approvals have been obtained
(as referred to in section 5 above), the Voluntary Takeover Bid will not be
subject to any condition.

 

7.   Cancellation of the Voluntary Takeover Bid: Pursuant to article 20.2 of
the Communiqué, BBVA may cancel the Voluntary Takeover Bid at any time before
the commencement of the voluntary takeover bid period. Should this be the
case, the cancellation of the Voluntary Takeover Bid would be specifically
disclosed to the CMB and to the market.

 

8.   Subsidiaries of Garanti listed in the market: The Voluntary Takeover
Bid may result in BBVA's acquisition of management control (as defined in the
Communiqué) at Garanti Faktoring A.Ş. and Garanti Yatırım Ortaklığı
A.Ş., two fully consolidated subsidiaries of the Company both of which are
listed at Borsa İstanbul. If this is the case, taking into consideration that
the Voluntary Takeover Bid is primarily aimed at increasing BBVA's stake in
Garanti (and not in these two listed subsidiaries) and the fact that these two
subsidiaries do not constitute a material portion of Garanti's business (less
than 1% each of Garanti group's consolidated assets according to Garanti
group's latest annual financial statements), BBVA plans to apply to the CMB
for an exemption from the mandatory tender offer requirements for such
subsidiaries in accordance with article (18)(1)(c) of the Communiqué.

 

9.   Authorized Broker and Dealer-Manager: As per Turkish regulations, BBVA
will need to appoint an investment institution holding the necessary licenses
to intermediate the Voluntary Takeover Bid. BBVA has decided to engage with
Garanti Yatırım Menkul Kıymetler A.Ş., a subsidiary of Garanti and an
affiliate of BBVA, as authorized broker and dealer-manager for the Voluntary
Takeover Bid.

 

10. Estimated timeline for completion of the Voluntary Takeover Bid: As the
Voluntary Takeover Bid can only be launched following receipt of the approval
of all relevant regulatory bodies, BBVA estimates that closing of the
Voluntary Takeover Bid will take place in the first quarter of 2022.

 

11. Estimated financial impacts for BBVA:The financial impacts for BBVA of the
Voluntary Takeover Bid will depend on the percentage of Garanti shareholders
that decide to accept the bid and sell their shares. BBVA estimates a maximum
impact of approximately minus 46 basis points in the Common Equity Tier 1
(fully loaded) ratio, an approximately 13.7% accretion to its 2022 earnings
per share 2  and an approximately 2.3% accretion to its tangible book value
per share(( 3 )) (assuming all Garanti shareholders accept the offer).

 

12. Analyst presentation: An analyst presentation is convened today at 9:30
a.m. (Madrid Time). The presentation can be followed via BBVA's website on the
Internet (www.bbva.com). A recording of the presentation will also be
available on the above website, for a period of at least one month.

 

Madrid, November 15, 2021

Disclaimer: The Voluntary Takeover Bid will not constitute an invitation to
participate in the offer in or from any jurisdiction in which, or to or from
any person to whom, it is unlawful to make such invitation under applicable
securities laws. The distribution of the information memorandum (which will be
prepared as per Turkish capital markets and securities regulations and will be
subject to the approval of the CMB) regarding the Voluntary Takeover Bid may
be restricted by law in certain jurisdictions. If and when approved by the
CMB, persons who receive such information memorandum are required to inform
themselves about, and to observe, any such restrictions, and neither BBVA nor
Garanti is responsible for the compliance by such persons with such
restrictions.

 

(( 1 )) The applicable exchange rate is 11.43 Turkish Lira per Euro as of
November 12, 2021.

 2  The determination of the impact on earnings per share for 2022 was made
taking into consideration for Garanti the Bloomberg consensus estimates of net
income amounting to 14,276 million Turkish Lira and for BBVA the company
gathered consensus estimates of net income amounting to 4,052 million Euro.
The exchange rate applied was 12.91 Turkish Lira per Euro as per the average
of FX forward curve for 2022 as of November, 12, 2021.

(( 3 )) The determination of the impact on Common Equity Tier 1 and tangible
book value per share was made taking into consideration the group's financial
statements as of September 30, 2021, assuming the impact on Common Equity Tier
1 of the 3,500 million Euro share buyback program already announced to the
market, and an exchange rate of 11.43 Turkish Lira per Euro. The amount of the
impact on Common Equity Tier 1 and tangible book value per share will vary
from the date of this disclosure up to the date of closing of the Voluntary
Takeover Bid due to, among other circumstances, changes in the book value of
the Company and changes in the Euro/Turkish Lira exchange rate.

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