Shares in Sacyr Vallehermoso fell more than 5 per cent on Tuesday after the Spanish construction group said it was poised to take a 3.1 stake in BBVA, the country's second-biggest bank, in a move broadly seen as a challenge to Francisco Gonz?lez, the chairman.
By the market close, the shares were down 5.3 per cent at ?11.51, and off more than 10 per cent since the company on Monday confirmed market rumours it was building a stake in BBVA. Sacyr, with a market value of about ?3bn ($4bn), plans a ?1.1bn capital increase to fund the purchase.
Sacyr says privately it has enough support from existing and potential investors to build an effective 8 per cent holding in BBVA. Even with 3.1 per cent it would be by far the biggest single shareholder, ahead of Telef?nica, the telecoms group, with just 1 per cent. Its objective is to win four places on the bank's 16-seat board and force a radical shake-up of management.
However, BBVA considers the stake-building operation hostile, and insiders have warned that the grab for influence would fail. Although Mr Gonz?lez controls just 0.034 per cent of the capital, he has been able to count on the backing of investors representing 50 per cent of the share capital.
"Sacyr's 3 per cent won't buy any seats on the board," said a person close to Mr Gonz?lez. He described the company's ambitions as a "preposterous operetta".
Investors agreed, dumping Sacyr shares in massive volume on concerns about the dilutive effect of the capital increase and doubts about the logic of the operation.
Banking sources said Luis de Rivero, Sacyr's chairman, went to Jos? Ignacio Goirigolzarri, the chief executive of BBVA, last Monday demanding four seats on the board. After being rebuffed, he convened Sacyr's directors the following day and announced the company would buy 2.3 per cent of BBVA. This was raised to 3.1 per cent on Tuesday when Sacyr was forced to file a statement to Spain's stock market regulator. It said board members would subscribe to as much as ?700m of a rights issue "if this were necessary".
With a large industrial portfolio and important presence in Spain and Latin America, BBVA was an attractive strategic investment for any company, analysts said. However, Sacyr risked paying a heavy price for little or no influence in the boardroom. "The most they could hope for with 3 per cent is one possible seat on the board," said one Madrid-based analyst.