DealBook: Santander Seeks $4.2 Billion I.P.O. of Its Mexican Unit

Tomas Bravo/ReutersA Santander branch in downtown Mexico City.

LONDON – Banco Santander of Spain said on Tuesday that it was looking to raise as much as $4.2 billion through the initial public offering of its Mexican unit.

The listing would be one of the largest I.P.O.’s ever in Mexico, and comes as the country’s economy continues to grow on the back of strong local demand. At the same time, American depository receipts of the unit would list on the New York Stock Exchange.

Santander, based in Madrid, is planning to sell as much as 24.9 percent of Grupo Financiero Santander México, and has set the price range of 29.00 pesos ($2.20) to 33.50 pesos a share, according to a regulatory filing released on Tuesday. Around 20 percent of the shares would be offered to Mexican investors, while the remaining stake would be sold to international investors.

The Mexican subsidiary is the country’s fourth largest-bank, based on assets, and had a total of $25 billion of outstanding loans at the end of June.

The Spanish bank said a three-week roadshow for investors would start on Tuesday, and shares in Grupo Financiero Santander México would begin to trade in Mexico and New York by the end of September.

“We want to continue playing a part in the growth of Mexico,” Santander’s chairman, Emilio Botín, said in a statement. “Our goal is to list our most significant subsidiaries within five years,”

Money raised from the listing would help to strengthen Santander’s capital reserves, according to a company statement. The bank has been hurt by a struggling domestic market, which has been buffeted by the European debt crisis.

Santander reported a 93 percent drop in second-quarter profit, to 100 million euros ($126 million), as it set aside more money to cover bad loans in the Spanish market.

Banco Santander, UBS, Bank of America Merrill Lynch and Deutsche Bank are coordinating the I.P.O.

Article source: http://dealbook.nytimes.com/2012/09/04/santander-seeks-4-2-billion-i-p-o-of-its-mexican-unit/?partner=rss&emc=rss