MADRID: Santander Holdings USA (SHUSA) and Santander Consumer USA Holdings (SC) have entered into a definitive agreement pursuant to which SHUSA will acquire all outstanding shares of common stock of SC not already owned by SHUSA via an all-cash tender offer for $41.50 per SC common share.
This transaction is followed by a second-step merger, in which a wholly owned subsidiary of SHUSA will be merged with and into SC, with SC surviving as a wholly owned subsidiary of SHUSA, and all outstanding shares of common stock of SC not tendered in the Tender Offer will be converted into the right to receive the Offer Price in cash.
The Offer Price represents a 14% premium to the closing price of SC common stock of $36.43 as of July 1, 2021, the last day prior to the announcement of SHUSA’s initial offer to acquire the remaining outstanding shares of SC’s common stock. SHUSA currently owns approximately 80% of SC’s outstanding shares of common stock.
The board of directors of SC formed a special committee consisting of the independent and disinterested directors of SC to negotiate and evaluate a potential transaction with SHUSA.
The board of directors of SC, acting on the unanimous recommendation of the Special Committee, has unanimously determined to recommend the Tender Offer to SC’s shareholders (other than SHUSA). The board of directors of SHUSA has unanimously approved the Transaction.
The Transaction is subject to customary closing conditions, including regulatory approval by the Board of Governors of the Federal Reserve System of the US. The Transaction is not subject to the approval of SC shareholders and is currently expected to close by late October or otherwise in the fourth quarter of 2021 upon receipt of regulatory approval.
The Transaction is expected to immediately contribute to Banco Santander, S.A.’s earnings and provide an effective deployment of capital. The estimated capital impact at closing to SHUSA’s CET1 ratio is a decline of 73 bps. The estimated capital impact at closing to Banco Santander’s CET1 ratio would be a decline of approximately 10 bps, and the Transaction is expected to be accretive to its earnings per share by approximately 3% in 2022.
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