Wednesday, August 10

Merlin Properties: the new Orcel case of Banco Santander that slows its action

The Banco Santander price has been trying for several weeks unsuccessfully to recover positions above 2.8 euros. This is a key area to rebuild the bullish structure, but the bank was unable to move past it.

Added to the market’s fear of the omicron variant was the noise generated among investors by the control of Merlin Properties. The 3 directors that the bank has in the Socimi were insufficient to dismiss the CEO of the group, Ismael Clemente.

Now, a period of uncertainty and attrition is opening that is often poorly received by investors.

Battle of attrition for Merlin and Banco Santander

There is a fairly closed consensus among analysts on the suitability of Clemente to run the Socimi.

“The fact that the CEO is staying is good news: he has been the driving force behind the success of the company, and it is far from obvious that Banco Santander would do a better job,” said the Alantra Equities analyst, Fernando Abril-Martorell.

Moreover, according to this expert, if Banco Santander “wants to control Merlin, it must bid for minorities, and not try to do it through the back door.”

This is not a contest that will topple Santander Bank, but it does focus on aspects that have nothing to do with the business. And it’s something that investors look at a lot, particularly foreigners.

In the end, “the negative news related to the boards of directors and corporate governance of companies is something to be attentive to because every day they have more relevance,” he said. Manuel Pinto, XTB analyst.

In addition, the confrontation caused a 6 percent collapse of the shares of Merlin, which also hurts Santander Bank, which is the main shareholder of the Socimi with 23 percent of the capital.

The Battle of Attrition for Control Merlin it seems to be served, especially since experts do not expect a short-term solution.

“We believe that this is a temporary truce, and that the period of instability / uncertainty is far from over,” he said. April-Martorell.

The situation is unlikely to settle

When these news that affect corporate governance occur, the investor doubts, although in this case they affect the company itself more. Merlin. But neither Santander Bank it will be immune to the contention.

In Pinto’s opinion, this is negative corporate governance news similar to the one trial recently held by the bank with Andrea Orcel, and which resulted in a compensation of 68 million euros for the Italian banker.

Abril-Martorell continues to uphold its recommendation to buy Merlin shares, but is not very optimistic about a possible peaceful solution to the conflict either.

“Looking at the longer term, it is unlikely that the situation will be fixed until one of the two parties leaves or Merlin is sold,” said the Alantra expert.

The surpassing of 2.85 euros is key for Banco Santander

In this Tuesday’s session, the titles of Santander Bank they are trading at 2.78 euros, less than 5 percent away from their key support, 2.65 euros.

This is the reference “that you do not have to lose in order not to further complicate your technical situation,” said the magazine’s chief analyst. INVESTMENT and of, Josep Codina.

“The situation is not the best all,” he said Manuel Pinto. Banco Santander’s price touches the top of a downward channel at 2.8 euros, which it has tried to drill on several occasions without success.

The point is that “any attempt to rebound must first exceed the 2.85 euro area,” said Codina. And the bank has not touched these levels for practically a month.

Later, it should try to close the gap left in the fall at the end of November between 2.92 and 3.02 euros.

These ten cents of gap “are important to return to the action within the lateral scenario, but with a positive bias, so that it can have the capacity to attack the resistance zone that it has in the range of 3.3 euros”, stressed Codina.