The bank offers a 15% premium over the reference price, with a total consideration of up to 1.908 billion euros. It implies applying a 26e PER of 8.2x and a 26e P/BV of 1.1x.
Reported by Renta 4
Banco Santander has announced its intention to launch an offer to acquire all ordinary shares, preferred shares, units, and American Depositary Shares (ADS) of Santander Brasil that it does not yet own, representing approximately 10% of its share capital.
The operation is expected to be carried out through voluntary and simultaneous public exchange offers in Brazil and the United States.
Santander offers a 15% premium over the reference price, with a total consideration of up to €1.908 billion. This amount would imply valuing 100% of Santander Brazil at just over €19 billion, which involves applying a 26e PER of 8.2x and a 26e P/BV of 1.1x.
The consideration will consist of newly issued shares of Banco Santander, for which the capital increase must be approved at the General Shareholders’ Meeting, representing up to 1.1% of the current share capital if there is 100% acceptance (approximately 156 million shares).
The exchange offer will not be subject to a minimum acceptance condition.
Shareholders of Santander Brasil who accept the offer will receive: (i) for each unit or ADS of Santander Brasil, 0.4056 newly issued shares of Banco Santander and (ii) for each ordinary share or preferred share of Santander Brasil, 0.2028 newly issued shares of Banco Santander
Assessment: The operation is consistent with Santander’s disciplined capital allocation hierarchy. It is expected to contribute to improving earnings per share, strengthen profit growth, and the group’s long-term organic capital generation.
The implicit multiples in the operation in terms of PER and P/VC 26e we believe are reasonable, highlighting their neutral impact on capital and therefore should not raise any doubts about the bank’s dividend policy.
