Santander eyes 3.4 billion euros from Mexico listing

Tue Sep 4, 2012 2:29pm EDT
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By Sonya Dowsett and Herbert Lash

MADRID/MEXICO CITY (Reuters) - Spanish bank Santander (SAN.MC: Quote) said on Tuesday it would seek to raise up to 3.4 billion euros ($4.3 billion) through the stock market listing of a quarter of its Mexican unit as it looks to boost capital levels and weather a grinding recession at home.

The euro zone's biggest bank said it would list up to 24.9 percent of Grupo Financiero Santander Mexico in what would be the biggest public offering of a Mexican company to date, valuing the unit at up to 13.7 billion euros.

"The total (raised) in this operation will increase our capital" in Spain, Chairman Emilio Botin, wearing a red tie to match Santander's logo, told a news conference in Mexico City. "Not a peseta will be put toward cleaning up real-estate."

He said Santander, which has been struggling with writedowns from the bursting of the Spanish property bubble, aimed to list other important subsidiaries within five years, and acknowledged economic difficulties back home in Spain.

"Everyone knows the situation in Spain is not like that in Mexico," Botin said. "Mexico's is magnificent, and Spain's ... we're not at our best moment."

The pricing of the offer is between 29 and 33.5 Mexican pesos ($2.20-$2.54) per share, slightly below some analysts' estimates for up to 36 pesos.

The placing of the stock starts on Tuesday and the shares are expected to start trading in Mexico and New York around September 26, the bank said.

The transaction is in two tranches: one in Mexico, for 20 percent of the shares in the global offering, and one outside Mexico, including the United States, representing 80 percent.   Continued...

Emilio Botin, chairman of Spain's largest bank Santander, gives a speech during a news conference at a hotel in Mexico City September 4, 2012. REUTERS/Henry Romero