New York, Oct. 13 - Banco Santander, SA said it will buy the remaining 75.65% of Sovereign Bancorp Inc. that it does not already own for $1.9 billion.
Santander will pay 0.2924 of its American Depositary Shares for each Sovereign share. Based on Santander's closing price on Oct. 10, the value is $3.81 per share.
The acquisition is subject to customary conditions, including necessary bank regulatory approvals in the United States and Spain and approval by both companies' shareholders.
Relational Investors, LLC has agreed to vote its 8.9% of Sovereign shares in favor of the transaction, the banks said.
Closing is expected in the first quarter of 2009.
"This acquisition represents an excellent opportunity for Santander and for Sovereign," said Juan R. Inciarte, executive board member of Banco Santander, in a news release.
"We know Sovereign very well. It is a strong commercial banking franchise in one of the most prosperous and productive regions of the United States, with high growth potential, which will further diversify Banco Santander's geographical reach."
"Given the unprecedented uncertainty in the current market environment and the challenges facing Sovereign, we believe this is the right transaction at the right time for Sovereign," added Ralph Whitworth, chairman of the capital and finance committee of Sovereign's board of directors.
Sovereign is the Wyomissing, Pa., parent of Sovereign Bank. Santander is based in Madrid, Spain, and is the largest bank in the euro zone by market capitalization.
| Acquirer: | Banco Santander, SA
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| Target: | Sovereign Bancorp Inc.
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| Announcement date: | Oct. 13
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| Transaction total: | $1.9 billion
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| Price per share: | 0.2924 Santander ADS
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| Expected closing: | First quarter of 2009
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| Stock price for acquirer: | NYSE: STD: $14.50 at close Oct. 13
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| Stock price for target: | NYSE: SOV: $3.68 at close Oct. 13
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