Nov. 10 (Bloomberg) -- Banco Santander SA, the Spanish bank that announced three acquisitions in as many months, will raise 7.2 billion euros ($9.2 billion) selling new stock in a rights offer to boost capital.

The 1.6 billion shares will be sold at 4.5 euros each in a fully underwritten offering, the Santander-based bank said today in a statement. Santander fell 4 percent to 8 euros as of 11:13 a.m. in Madrid trading.

Spain's biggest lender has acquired Sovereign Bancorp Inc. in the U.S. and Alliance & Leicester Plc and parts of Bradford & Bingley Plc in the U.K. this year to add about $130 billion of deposits and 1,200 branches. Planned asset sales to help strengthen capital have been delayed until markets improve, the bank said in a separate statement.

``Santander needed capital so the sooner the better,'' said Arturo de Frias, an analyst at Dresdner Kleinwort in London who recommends buying the stock. ``The amount is slightly higher than what I was expecting.''

Santander dropped the sale of its asset-management and insurance businesses because of market conditions, Chief Executive Officer Alfredo Saenz said last month. The lender has also said it could sell its Venezuelan unit or its stake in oil company Cia. Espanola de Petroleos SA. Saenz said last month that the bank's capital position was ``more than sufficient.''

Santander joins banks across Europe that are selling stock to replenish capital. Barclays Plc, Britain's second-biggest bank, is tapping sovereign wealth funds in the Middle East to raise as much as 7.3 billion pounds ($11.8 billion), selling bonds that investors must swap for stock as well as preference shares.

Capital Ratio

Royal Bank of Scotland Group Plc is selling 20 billion pounds of stock in an offering backed by the U.K. government. UniCredit SpA, Italy's biggest bank, is selling stock and convertible bonds for 3 billion euros in a sale underwritten by a group of new and existing investors, including Allianz SE.

Santander's core capital ratio was 6.3 percent at the end of the third quarter and the bank aims to increase that to 7 percent, it said in a presentation to investors.

The 2009 dividend per share will be flat from 2008, and the bank will dedicate 45 percent to 55 percent of profit to the payout, Chief Financial Officer Jose Antonio Alvarez said on a conference call. The rights offering isn't related to acquisitions, he said.

To contact the reporters on this story: Paul Tobin in Madrid at ptobin@bloomberg.net; Jon Menon in London at jmenon1@bloomberg.net

Last Updated: November 10, 2008 05:32 EST