Banco Santander to Acquire 75.65% of Sovereign Bancorp it Does Not
Currently Own for Approximately US$1.9 billion (euro 1.4 billion)
MADRID, Spain and PHILADELPHIA, Oct. 13 /PRNewswire-FirstCall/ -- Banco
Santander, S.A. (NYSE: STD) and Sovereign Bancorp Inc., ("Sovereign")
(NYSE: SOV), parent company of Sovereign Bank ("Bank"), announced today
that Banco Santander will acquire Sovereign in a stock-for-stock
transaction. Santander currently owns 24.35% of Sovereign's ordinary
outstanding shares. The Capital and Finance Committee composed of
independent directors of Sovereign requested that Santander consider
acquiring the 75.65% of the Company it did not currently own. The Capital
and Finance Committee evaluated the transaction and recommended the
transaction to the full Board.
Under the terms of the definitive transaction agreement, which was
approved by the Executive Committee of Santander and unanimously approved
by the non-Santander directors of Sovereign, Sovereign shareholders will
receive 0.2924 Banco Santander American Depository Shares (ADSs) for every
1 share of Sovereign common stock they own (or 1 Banco Santander ADS for
3.42 Sovereign shares). Based on the closing stock price for Santander ADSs
on Friday, October 10, 2008, the transaction has an aggregate value of
approximately US$1.9 billion (euro 1.4 billion), or US$3.81 per share. The
transaction meets Santander's criteria for acquisitions, both
strategically, by significantly enhancing the geographical diversification
of the Group, and financially, with a projected net profit for Sovereign of
$750 million in 2011.
Juan R. Inciarte, Executive Board Member of Banco Santander, stated,
"This acquisition represents an excellent opportunity for Santander and for
Sovereign. 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. We look forward to working closely
with Sovereign's senior management and welcoming the entire Sovereign team
to Santander."
Ralph Whitworth, Chairman of the Capital and Finance Committee of
Sovereign's Board of Directors, said, "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. We
considered our options and this transaction very carefully and believe that
it provides stability and upside potential for Sovereign, its shareholders,
customers, employees and other stakeholders. We know Santander well and
look forward to working with them to close this transaction."
The transaction is subject to customary closing conditions, including
necessary bank regulatory approvals in the U.S. 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. In addition, all
of the non-Santander directors have agreed to vote their shares in favor of
the transaction. Banco Santander will call an Extraordinary General Meeting
of the Bank's shareholders to approve a capital increase and issuance of
approximately 147 million new shares, or approximately 2% of Banco
Santander's capital. The transaction is expected to close in the first
quarter of 2009.
About Banco Santander
Banco Santander, S.A. (SAN.MC, NYSE: STD) is the largest bank in the
euro zone by market capitalization and was fifth in the world by profit in
2007. Santander engages primarily in commercial banking with complementary
activities in global wholesale banking, cards, asset management and
insurance. Founded in 1857, Santander had as of June, 2008, EUR 918,332
million in assets and EUR 1,050,928 million in managed funds, more than 80
million customers, 13,000 branches and a presence in some 40 countries. It
is the largest financial group in Spain and Latin America. Through its
Abbey subsidiary, Santander is the sixth largest bank in the United
Kingdom, and is the third largest banking group in Portugal. Through
Santander Consumer Finance, it also operates a leading franchise in 20
countries, with its principal focus in Europe (Germany, Italy and Spain,
among others) and the U.S. In the first half of 2008, Santander registered
euro 4,730 million in net attributable profit, an increase of 22% from the
previous year, excluding capital gains.
For more information, see http://www.santander.com.
About Sovereign
Sovereign Bancorp, Inc., (NYSE: SOV), is the parent company of
Sovereign Bank, a financial institution with principal markets in the
Northeastern United States. Sovereign Bank has 750 community banking
offices, over 2,300 ATMs and approximately 12,000 team members. Sovereign
offers a broad array of financial services and products including retail
banking, business and corporate banking, cash management, capital markets,
wealth management and insurance. For more information on Sovereign Bank,
call 1-877-SOV-BANK.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the US Private Securities Litigation Reform Act of 1995. Forward
looking statements may be identified by words such as "expects",
"anticipates", "intends", "plans", "believes", "seeks", "estimates", "will"
or words of similar meaning and include, but are not limited to, statements
about the expected future business and financial performance of Santander
resulting from and following the implementation of the transaction
described herein. These statements are based on management's current
expectations and are inherently subject to uncertainties and changes in
circumstance. Among the factors that could cause actual results to differ
materially from those described in the forward looking statements are
factors relating to satisfaction of the conditions in the transaction
agreement, Santander's ability to successfully combine the businesses of
Santander and Sovereign and to realize expected synergies from the
combination, and changes in global, political, economic, business,
competitive, market and regulatory forces, as well as those factors
described under the headings 'Risk Factors' and 'Operating and Financial
Review and Prospects' in Santander's annual report on Form 20-F for the
year ended December 31, 2007, as filed with the US Securities and Exchange
Commission (the "SEC"). Neither Santander nor Sovereign undertakes any
obligations to update the forward-looking statements to reflect actual
results, or any change in events, conditions, assumptions or other factors.
Additional Information About This Transaction
In connection with the proposed transaction, Santander will file with
the SEC a Registration Statement on Form F-4 that will include a proxy
statement of Sovereign that also constitutes a prospectus of Santander.
Sovereign will mail the proxy statement/prospectus to its stockholders.
Sovereign will urge investors and security holders to read the proxy
statement/prospectus regarding the proposed transaction when it becomes
available because it will contain important information. You may obtain
copies of all documents filed with the SEC regarding this transaction, free
of charge, at the SEC's website (http://www.sec.gov).
Proxy Solicitation
Santander, Sovereign and their respective directors, executive officers
and certain other members of management and employees may be soliciting
proxies from stockholders in favor of the transaction. Information
regarding the persons who may, under the rules of the SEC, be considered
participants in the solicitation of the stockholders in connection with the
proposed transaction will be set forth in the proxy statement/prospectus
when it is filed with the SEC. You can find information about Santander's
executive officers and directors in its annual report on Form 20-F filed
with the SEC on June 27, 2008. You can find information about Sovereign's
executive officers and directors in its definitive proxy statement filed
with the SEC on March 24, 2008. You can obtain free copies of these
documents as described above.
SOURCE Sovereign Bancorp Inc.
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Related links:
http://www.sovereignbank.com
http://www.santander.com
CONTACT:
For Santander, Financial, Angel Santodomingo,
+34-91-289-0921, asantodomingo@gruposantander.com, or Media,
Peter Greiff, +34-91-289-5207, pgreiff@gruposantander.com; or for
Sovereign, Financial, Kirk Walters, +1-617-346-7346,
kwalter1@sovereignbank.com, or Stacey Weikel, +1-610-320-8428,
sweikel@sovereignbank.com, or Media, Andrew Gully,
+1-617-757-5513, agully@sovereignbank.com, or Ellen Molle,
+1-617-757-5573, emolle@sovereignbank.com; or for both Santander
and Sovereign, Joele Frank or Steve Frankel or Jamie Moser of
Joele Frank, Wilkinson Brimmer Katcher, +1-212-355-4449
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