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Banco Santander Offers To Buy 25% Of Its Brazilian Subsidiary - Quick Facts

Spanish commercial bank Banco Santander S.A. (SAN,BNC.L) said that it offers to acquire all shares of Banco Santander Brasil not already held by Grupo Santander, representing about 25% of Santander Brasil's share capital.

Banco Santander said it will offer a 20% premium over the last closing market price. The consideration offered under the transaction, which is expected to be completed by October, would be paid by means of Banco Santander shares.

The company noted that offer is voluntary and, therefore, minority holders of Santander Brasil may choose whether or not to participate in the transaction, which is not subject to a minimum acceptance level.

Santander said it will acquire all shares held by shareholders accepting the offer and has no intention of causing the delisting of Santander Brasil from either the Sao Paulo stock exchange or the New York Stock Exchange. Banco Santander shares will be traded on the Sao Paulo stock exchange through Brazilian Depositary Receipts or BDRs.

Shareholders who accept the offer will receive, through BDRs or through American Depositary Receipts or ADRs, 0.70 newly-issued shares of Banco Santander for every unit or ADR of Santander Brasil.

If all shares held by minority shareholders were tendered in the offer, Banco Santander would have to issue approximately 665 million shares, which represent 5.8% of the current share capital (4.686 billion euros).

The transaction is also beneficial for the shareholders of Banco Santander, given that it will increase their Earnings per share from the outset.

The market consensus anticipates that Santander Brasil will obtain a profit close to 6.400 billion of reais brasileiros in 2015 or about 2.000 billion euros from which, with its current share capital participation, about 1.500 billion euros would be attributable to Grupo Santander.

Therefore, if all shares held by minority shareholders are tendered in the offer, Santander Brasil would contribute to Grupo Santander with an additional amount of about 500 million euros in 2015, entailing a 1.3% increase in the earnings per share in 2015 and a 1.1% increase in the earnings per share in 2016.

by RTT Staff Writer

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