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Banco Santander Looks to Take Over Mexican Subsidiary

04/12/2019 | 01:47am

By Anthony Shevlin

Spain's Banco Santander said Friday that it intends to make an offer to acquire all the shares it doesn't already hold in its Mexico subsidiary, Banco Santander SA Institucion de Banca Multiple Grupo Financiero Santander Mexico (BSMX.MX).

The Spanish bank said the offer would be for up to approximately 25% of the subsidiary's share capital, and that it expects the deal to positively contribute to its 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.

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.

Write to Anthony Shevlin at; @anthony_shevlin

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