Despite the risks which some people have highlighted with regard to Santander’s absorption of Popular, neither analysts nor investors seem to have been spooked by the massive rights issue launched by Santander last Friday. All in all, it seems the acquisition could be described as something of a dream deal.
Banco Santander capital increase
Banco Santander will raise 7.072,4 billion euros as expected via a rights issue in order to”provide sufficient coverage for the acquisition of 100% of Banco Popular’s capital.” The operation will consist in issuing 1.458,2 million new shares at 4,85 euros/share, which includes the nominal value of 0,5 euros plus an issue premium of 4,35 euros/share. This capital hike implies a discount of 17.75% with respect to theoretical price excluding the subscription right.