EUR 200.00 For Business Accounts Only

UNICAJA / LIBERBANK: MERGER DETAILS (ANÁLISIS BANCO SABADELL)

The merger does not only make industrial sense but it also offers significant value generation potential, while the risk profile and solvency & liquidity position improve. In this regard, the deal will allow the combined group to endure the challenging environment of interest rates and NPL the sector is faced with in 2021-2022e thanks to the fact that Net Profit growth will be based on cost savings being met (€ 192 M before taxes, € 160 M for the merger), with an estimated improvement on EPS’23 >60% and >5.5% of RoTE. It is the same case as in CABK and BKIA merger although with lower execution risk, in our view, thanks to the fewer overlapping and competition problems in some segments.
We have carried out a preliminary valuation of the impact and we estimate a T.P. Dec’21 for UNI with all the merger details announced today of € 1.18/sh.,yielding>65% upside. In the case of LBK, our calculation is based on the exchange ratio announced (0.3609 LBK share x 1 UNI share), resulting in a T.P. of around € 0.43/sh. (+58% upside). Both share prices are seeing a negative reaction today in a move we see as pure trading following the recovery from the past months. Thus, we believe there is an opportunity to take positions at highly appealing prices.