Banco Santander has announced its intention to make an offer to acquire all of the shares of Santander México that are not owned by the group and that represent approximately 25% of the share capital of the Mexican entity, a transaction valued at close to 2,600 million euros which is expected to be launched and liquidated in the second half of the year.
Shareholders who accept the offer would receive 0,337 new shares issued by Banco Santander for each share of Santander México and 1,685 American depositary shares (ADS) of Banco Santander for each of Santander Mexico, as reported by the entity on Friday.
The exchange ratio implies a premium of 14%, taking into account the prices of the shares of Banco Santander and Santander México at the close of the markets on Thursday and 22% on the weighted average price per volume of the last month.
In the event that all shares owned by minority shareholders accept the offer, considering the consideration currently provided, Banco Santander should issue approximately 572 million shares, which represents 3.5% of the current share capital of Banco Santander.
Taking into account the closing price of the quote yesterday, 4,477 euros, these shares are valued at almost 2,600 million euros.
The group chaired by Ana Botín explained that the exchange ratio takes into account both the dividend charged to the results of 2018 which is expected to be approved by Santander Mexico at its ordinary annual general meeting on April 29 and will be paid in May 2019, as well as the complementary dividend charged to the 2018 results that Banco Santander wants to distribute at the beginning of that year. month and whose approval will be submitted to the general meeting of shareholders this Friday.
The shareholders of Santander México that accept the offer will be entitled to the first dividend on account of Banco Santander charged to 2019, which is expected to be paid between October and November of this year.
Because it is a voluntary offer, the minority of the Mexican subsidiary can participate or not in the operation, which will not be subject to a minimum level of acceptance.
The exchange ratio will provide for an upward adjustment that reflects, in the event that the settlement occurs after the reference date of the dividend expected to be paid by Banco Santander between October and November, the value of that dividend and any subsequent dividends. of Banco Santander that the accepting shareholders have not received, and a downward adjustment for the value of any additional dividends of Santander Mexico received by them after the dividend expected to be paid by Santander México in May 2019.
At present, Banco Santander does not intend to request the exclusion of Santander México from the Mexican Stock Exchange or the New York Stock Exchange.
In relation to the operation, the shares of Banco Santander, which are currently registered in the International Quotation System of the Mexican Stock Exchange, will be registered in the Mexican National Securities Registry and will be listed on the Mexican Stock Exchange.
As reported by the entity, the operation is consistent with the group's strategy to increase its weight in growth markets and "reflects the confidence of Banco Santander in Mexico and its Mexican subsidiary, as well as its potential for long-term growth" .
The group has stressed that the operation is consistent with its strategy of increasing its weight in growing markets and reflects its confidence in Mexico and its Mexican subsidiary as well as its potential for long-term growth.
The entity expects the operation to have a return on investment (ROI) of approximately 14.5%, which is neutral in profit per share, and which positively contributes to the Group's CET1 ratio.
The beginning of the offer and this will be subject to the usual conditions in this type of operations, including the authorization of the Mexican National Banking and Securities Commission and the Securities and Exchange Commission (SEC) of the United States, the absence of any change adverse material in the financial situation, the result of the operations or prospects of Santander México, as well as the approval of the general meeting of shareholders of Banco Santander.