Banco Santander SA said it would seek to raise as much as $4.29 billion with a sale of shares in its Mexican unit as Spain’s biggest bank bolsters capital after booking charges for its Spanish real estate.
Santander will seek to sell as much as 24.9 percent of its Grupo Financiero Santander Mexico SAB unit at 29 pesos to 33.50 pesos a share, the lender said in an e-mailed statement today. The sale of the stock, which will start trading in Mexico and New York on or about Sept. 26, values the unit at as much as $17.2 billion, the Santander, Spain-based lender said.
The share sale will help Santander bolster capital after it set aside 21 billion euros ($26.4 billion) in provisions since the start of last year to cover losses on souring assets such as Spanish real estate. The Mexican sale will add about half a percentage point to Santander’s core capital ratio, a measure of financial strength, which stood at 10.1 percent at the end of June under Basel II rules.
Santander will seek to sell 20 percent of the shares in Mexico and the rest in the U.S. and elsewhere, the company said. The deal will be the largest ever share sale by a company in Mexico. Santander Mexico will be the only financial institution from that country to trade in New York, the bank said.
The company said the Mexican stake sale was part of its strategy of seeking stock listings for its banks in the countries where it operates. The bank will seek to list all its major units within five years, Chairman Emilio Botin said in a statement today.