Bloomberg News

Santander Surges on First Day After Offering: Mexico City Mover

September 26, 2012

Grupo Financiero Santander Mexico SAB, the bank that carried out the nation’s biggest share offering, surged in its first trading day after the sale.

Santander Mexico climbed to 33.41 pesos at the close in Mexico City, an increase of 6.9 percent from yesterday’s pricing of 31.25 pesos. The price range proposed in the prospectus was for 29 pesos to 33.50 pesos a share. The offering was carried out in Mexico and the U.S.

The sale of as much as $4.09 billion in shares is part of efforts by Banco Santander SA (SAN), Spain’s biggest bank and Santander Mexico’s parent, to bolster capital amid real estate losses. Chairman Emilio Botin has said that the firm plans to list its biggest units within the next five years.

“Mexico has a lot of room” to increase banking penetration, said Luis Rodriguez, an analyst at Casa de Bolsa Finamex SAB in Guadalajara, Mexico. The stock was sold at “a fair price, and the number of bids was very high, meaning there’s appetite.”

The transaction will raise between 2.77 billion euros ($3.56 billion) and 3.18 billion euros, depending on how a so- called green-shoe option is exercised, Santander said in a statement sent today by e-mail. The deal valued the unit at 12.78 billion euros, according to the bank. Santander said Sept. 4 it would seek to raise as much as 3.41 billion euros by selling as much as 24.9 percent of its Mexican unit.

Order Demand

The offering attracted about $20 billion in orders, two people with knowledge of the deal said. It received requests for about 4.8 times as many shares as were offered, said the people, who asked not to be identified because the terms are still private.

Santander participated as an underwriter on both the international and Mexican share sales. UBS AG, Deutsche Bank AG, and Bank of America Corp. served as global coordinators while Barclays Plc, Goldman Sachs Group Inc., Citigroup Inc., JPMorgan Chase & Co., Credit Suisse Group AG and Royal Bank of Canada were joint bookrunners, according to the filings.

The local units of Banco Bilbao Vizcaya Argentaria SA, HSBC Plc and Citigroup helped underwrite the Mexican secondary offering along with Santander itself.

Marcos Martinez Gavica, chief executive officer of the bank, said in an interview with Bloomberg Television from New York that the company plans to accelerate growth in Mexico after the share offering.

To contact the reporters on this story: Jonathan J. Levin in Mexico City at jlevin20@bloomberg.net; Jose Enrique Arrioja in Mexico City at jarrioja@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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