Benfica's shares are trading sharply, reacting to the end of the club's takeover bid on SAD. Trading was suspended for two days and the suspension ended today.
The bonds sink 10.74% to 2.50 euros, precisely half of the counterpart of the offer of 5 euros per share that has now fallen to the ground. With this drop, stocks are trading at the lowest level since February 2019.
Benfica asked for an end to the takeover bid and denies that CMVM failed to bid
Benfica SAD indicated this Tuesday that the holding company Benfica SGPS requested the revocation of the partial takeover bid on the Eagles' SAD and that it had been discussing this request with the CMVM two weeks ago, since the announcement of the suspension of the Liga Nos, on March 12 .
In communication sent to the Securities Market Commission (CMVM), it is said that the offer was not “failed” by the supervisor and that SAD will challenge the proposal to reject the offer that was notified by the CMVM, considering that the OPA is in compliance with all applicable legal provisions.
For the revocation request, “the alteration of the circumstances determined by the pandemic (…) and its impacts, direct and indirect” is invoked.
Benfica SGPS underlines that “it will give its opinion at a prior hearing on the project to reject the request for registration of an offer” by the supervisor. This is because “it reiterates the full compliance of the offer with all applicable legal provisions”. This position comes a day after SAD confirmed that it was notified of the CMVM's intention to “fail” the OPA.
In the statement, it is also stated that SAD's stake in Benfica Estádio was sold to the holding company and that this was communicated to the market. Later, in October, a new contract was signed for the use of the Luz stadium by SAD until June 30, 2041.
It was also agreed to receive the benefit in advance for the use of a total of 61.9 million euros, which corresponds to a 34.5% discount compared to the 94.5 million foreseen.
“With respect to this amount of 61,905,254 euros, the parties agreed that 32,905,254 euros of that amount should be offset against Benfica Estádio's existing debt to Benfica SAD, thus not giving rise to a financial flow” and that “the remainder , specifically the amount of 29,000,000 euros, was paid by Benfica SAD to Benfica Estádio “, details SAD.
According to Benfica SGPS, “the immediate anticipation of that amount (…) had as immediate counterparts for Benfica SAD, on the one hand, the profitability of its treasury surplus, due to the fact that it actually obtained a discount of 34.5 % in the amount that he would have to pay to Benfica Estádio and, on the other hand, a reduction of his liabilities of 61,905,254 euros, for the settlement of these amounts “.
The new contract between SAD and Benfica Estádio and the prepayment agreement by the sports limited company are on the basis of the intention expressed by the supervisor to reject the application for registration of the OPA, as found by Negócios. In the CMVM's understanding, the operation translated, in practice, into a “financial assistance” from SAD to the “holding company” so that it could buy the shares of SAD itself, something that is not allowed in the context of an OPA.
SAD also guarantees that the funds allocated to the OPA are held by Benfica SGPS and cannot be used by SAD to reinforce the squad.
“Benfica SAD further confirms that any funds that are owned by Sport Lisboa e Benfica, SGPS, SA (whether or not they have any indirect relationship with the referred contract) do not belong to it, so, naturally, Benfica SAD cannot use such funds, contrary to what was incorrectly mentioned by some media, “concludes the statement.