Banco Santander Looks to Take Over Mexican Subsidiary -- Update
April 12 2019 - 1:42AM
Dow Jones News
--The Spanish bank is looking to acquire roughly 25% of
Santander Mexico's share capital
--The exchange offer is expected to be launched and settled in
the second half of the year
--Santander Mexico holders that accept the offer would receive
Santander Group dividends from October
By Anthony Shevlin
Spain's Banco Santander SA (SAN.MC) intends to make an offer for
all the shares it doesn't already hold in its Mexico subsidiary, as
part of the company's overall strategy to deploy more capital in
Latin America.
The Spanish bank said Friday that the offer for Banco Santander
SA Institucion de Banca Multiple Grupo Financiero Santander Mexico
(BSMX.MX) would be for up to approximately 25% of the subsidiary's
share capital.
Santander expects the deal--which it described as a "low-risk"
way to improve its growth profile--will positively contribute to
the group's CET1 ratio, be neutral on earnings per share and have a
return on investment of around 14.5%.
"The offer will be voluntary and, therefore, minority
shareholders of Santander Mexico may choose whether or not to
participate in the transaction, which will not be subject to a
minimum acceptance level," the bank said.
If all shares held by minority shareholders in Santander Mexico
are tendered in the offer, the Spanish bank would have to issue
around 572 million shares at the currently expected consideration,
which it says represents 3.5% of its current share capital.
"Santander Mexico holders that accept the offer will receive
Santander Group dividends starting in October 2019," the Spanish
bank said.
Shareholders who accept the offer at the expected consideration
would receive 0.337 newly issued shares of Banco Santander for
every share of Santander Mexico, as well as 1.685 American
Depository Shares of Banco Santander for every ADS of Santander
Mexico.
The exchange ratio implies a 14% premium based on the closing
price of both banks' shares on April 11, or 22% based on the past
month's volume weighted average price, the bank said.
The exchange offer is expected to be launched and settled in the
second half of the year.
Santander doesn't intend to seek to delist Santander Mexico from
either the Mexican or New York stock exchanges.
Write to Anthony Shevlin at anthony.shevlin@dowjones.com;
@anthony_shevlin
(END) Dow Jones Newswires
April 12, 2019 02:27 ET (06:27 GMT)
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