Mexican save

5 September 2012 By George Hay Follow @gfhay

Spain’s biggest bank is seeking up to $4 bln by listing 25 pct of its Mexico arm. The move is consistent with its strategy, and either way Santander shouldn’t need to tap the current Spanish bank bailout. But if Spain deteriorates, the lender will need all the capital it can get.

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Santander on Sept. 4 announced the range for an initial public offering of up to 24.9 percent of its Mexican business.
The Spanish bank said the price range for its Mexican listing, which constitutes 20 percent of the shares being offered, would be between 29 and 33.5 pesos, implying a total offer amount of between 3 and 3.4 billion euros. That implies a maximum valuation of 13.7 billion euros for Santander Mexico as a whole.
The pricing for its New York listing will be priced between $10.99 and $12.70 per American Depository Receipt, each of which represents five shares. That implies a total offer amount of between $3.7 billion and $4.3 billion, valuing the whole company at $17.2 billion.
The shares should be quoted in Mexico and New York on or around Sept 26. It should increase Santander’s core Tier 1 capital by 50 basis points.
Santander shares rose 0.5 percent to 5.7 euros on Sept 4.

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