BBVA bides time to reopen bid

Following is a letter sent to the Financial Times:

Sir/Madam,

It sounds like BBVA is following an intelligent strategy by not rushing in to renew its bid for BNL, now that the 'new' Bank of Italy has rightly rejected the Unipol bid (“BBVA bides time to reopen bid” Financial Times January 12, 2006).

It is not clear whether Unipol will appeal this decision and it is also not clear whether Unipol's allies who together with Unipol hold over 50% of the shares in BNL, will do the obvious thing, which is to walk away and accept the best offer which becomes available.

In one way, BBVA appears to be in a worse position now than before this Bank of Italy decision. Before this latest decision, BBVA had the alternatives of either renewing its bid for BNL or accepting Unipol's stated bid and making over €500 million in profit on its BNL holding. Now BBVA has two choices, one being making an offer for BNL, as before, or alternatively staying with a minority stake in BNL, as it has to date, but it does not have the profit alternative.

BNL shareholders, and Unipol shareholders for that matter, should hope that Unipol and its allies walk away from this deal and give BBVA a clear road. Given the way the two managements behave and perform, one allegedly using friends, manipulation and bribery and the other demonstrating continuously high shareholder returns through professional management, I know which management I would want to win BNL if I were a shareholder.

Onésimo Alvarez-Moro

See article:
Now that the Bank of Italy has vetoed Unipol's bid for Banca Nazionale del Lavoro, analysts say it is only a question of time before BBVA, Spain's second-largest bank, revives its bid for BNL.

"BBVA will go back, that is obvious," says LuisUrquijo, chief analyst at Ahorro Corporación, a Madrid broker. "It has fallen behind in the trend towards cross-border consolidation in Europe, and BNL remains its best bet."

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