Editor’s note: This article was first published in September 2013 and discusses Banco Sabadell’s capital increase of that month, long since completed; the amounts, share prices, rights-trading period and listing dates it cites refer to that operation.
Asked whether it is worth taking part in Banco Sabadell’s upcoming capital increase, we would answer with a resounding yes: it is an excellent opportunity to buy the shares at a good price with a view to the long term, and it is without doubt a moment I personally had been waiting for. Call it a gift for those of us who sold earlier and were hoping to buy back at lower prices.
The details of the capital increase:
The increase will amount to about 1,400 million euros and will consist of two consecutive capital increases.
The first will be for about 650 million euros, of which 425 million are already committed at a price of 1.64 euros per share. It is aimed at international investors of strategic importance and will be carried out through an accelerated private placement (accelerated bookbuilding).
The second will be aimed at Sabadell’s existing shareholders. It will be a rights issue (a capital increase with pre-emptive subscription rights), carried out as soon as the accelerated placement of the first increase is completed.
In this case the shares will be offered at 1.10 euros each, and the subscription rights will trade from 16 to 27 September. Sources at Sabadell said that every member of the board has committed to taking part in the second increase, as reported by Publico.es. These shares will start trading on 8 October and will carry the same economic and voting rights as the shares already listed.
According to the bank, the operation will make it possible to “strengthen its capital and bring in new significant shareholders for the bank’s future international expansion”.
Right now I don’t know what price the rights will trade at, although, as in any capital increase, we could see high volatility. Nor should we get carried away: we should only buy the rights if we get the chance to buy them at a truly attractive price.
Featured image: Folguerola Angela, CC BY-SA 3.0, via Wikimedia Commons.
