Banco Santander has decided to increase by 5% the terms of the voluntary offer announced last 30 July in order to obtain all of the ordinary shares, preferred shares, units (units) and American Depositary Shares (ADS) of Santander Brasil that it does not yet control, as it has communicated this Thursday.
These securities represent around 10% of the capital of its investee in Brazil, and the improvement will be implemented through parallel exchange offers in Brazil and the United States, all of it "after the recent evolution of the markets and the comments received from the groups of interest".
In particular, the entity chaired by Ana Botín has raised by 5% the exchange ratio previously communicated, with the aim of making the transaction "more attractive" for holders of Santander Brasil securities.
0.2124 per ordinary share
Thus, investors who accept the proposal will now receive, for each unit or ADS of Santander Brasil, 0.4260 newly issued shares of Banco Santander (compared with 0.4056 communicated on 30 July) and, for each ordinary or preferred share of Santander Brasil, 0.2130 new shares of Banco Santander (instead of the 0.2028 initially proposed).
Once the dividends paid by Banco Santander and Santander Brasil since 30 July have been adjusted, the exchange ratios as of this Thursday, 12 November, are 0.4246 shares of Banco Santander per unit or ADS, 0.2124 per ordinary share and 0.2122 per preferred share of Santander Brasil, already incorporating the improvement communicated today.
In all cases, Banco Santander securities will continue to be delivered in the form of Brazilian Depositary Receipts (BDR) or ADS, as applicable, and will continue to be traded on the stock exchanges of São Paulo (Brazil) and New York (United States), respectively.
166 million new shares
If the offer were accepted in full, Banco Santander would issue around 166 million new shares, approximately 1.1% of its current capital, and the maximum consideration would reach about 1,900 million euros, taking as reference the closing price of this Wednesday, 11.294 euros.
The entity will submit to a vote by its shareholders the capital increases necessary to meet the exchange at an extraordinary general meeting, the holding of which is scheduled for December 15. The bank emphasizes that the transaction is "fully aligned" with its long-term value creation strategy for the shareholder and falls within the group's disciplined capital allocation framework.
"It constitutes an attractive alternative to other capital allocation options, and at the same time it has a neutral impact on the group's capital ratio," the entity has said, specifying that, with the new offer conditions, it is expected to increase earnings per share by around 0.3% starting in 2029.
In addition, the tangible book value per share would increase by approximately 0.6%, in addition to generating "attractive returns" on capital, according to current market forecasts. Likewise, the transaction will help support the group's earnings growth in the long term and its capacity to generate organic capital in the coming years, according to Santander.