UNICAJA/LIBERBANK: NEW ROUND OF MERGER TALKS (ANÁLISIS BANCO SABADELL)
UNI and LBK have confirmed today they have resumed their merger talks, without having commissioned external advisors or made any decision. The resumption of talks is not a surprise, as we believe it is clearly one of the consolidation options making more sense in the sector in terms of complementarity and potential value enhancement.In this regard, assuming conservative synergies of around 30% of LBK’s cost base, we estimate an accretive impact on UNI’s EPS’22>20%.
Both stocks have reacted positively to the confirmation, with rises of +15% today. With this in mind, the share prices of both banks continue to assume a ratio of around 40% LBK/60% UNI. Thus, and bearing in mind UNI’s current levels (€ 0.73/sh.), a valuation close to the exchange ratio we deem most likely ,42%LBK/58% UNI, would mean a price of LBK of € 0.278-0.29/sh. with +5%/+9% upside vs. current levels (around € 0.265/sh.).
With this in mind, we have a positive stance on the deal, which would be clearly value-enhancing in the medium-term and we continue to see an opportunity through LBK (+5%-10% at current levels), as we believe that the exchange ratio should favour the latter. In any case, we reiterate our BUY recommendation for both stocks.
Unicaja Banco SA is a Spain-based financial institution (the Bank) engaged in the banking sector. The Bank offers services to individual and business customers. Its products and services range includes current and savings accounts, debit and credit cards, consumer and commercial loans, real estate credit, securities brokerage, funds management, leasing, factoring, pension plans, life and non-life insurance, international trade financing, money transfer, as well as treasury, among others. The Bank operates a number of branches in Spain and Morocco. The Bank is controlled by Fundacion Bancaria Unicaja.
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