Santander Brasil Drops Before Spanish Parent’s Buyout Offer Ends

Banco Santander Brasil SA tumbled as much as 12 percent, the biggest intraday drop since January, as its Spanish parent prepares to conclude an offer to buy 25 percent of the bank it doesn’t already own.

The unit’s shares were down 6.8 percent to 14.02 reais in Sao Paulo at 4:40 p.m. before Madrid-based Banco Santander SA’s voluntary offer to swap its stock for the subsidiary’s ends tomorrow. The unit plans to remain listed with a free float of less than 25 percent of its total shares, its chief executive officer, Jesus Zabalza, said in April.

“Investors are afraid to end up holding a stock with low liquidity after the auction,” which occurs tomorrow, Gilberto Tonello, an analyst at GBM Grupo Bursatil Mexicano in Sao Paulo, said today in a telephone interview. Shareholders have until today to decide whether to participate.

Santander said on April 29 it would issue as many as 665 million shares in the transaction, exchanging them for the unit’s stock at a ratio that valued the deal at 4.69 billion euros ($5.9 billion) at the time.

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