27th Jul 2007 15:21
Banco Santander Central Hispano SA27 July 2007 --------------------------------------------------------------------------------Press release-------------------------------------------------------------------------------- Santander's EGM approves financing for the acquisition of ABN assets • Equity will be increased by EUR 4 billion through a rights issue and another EUR 5 billion will be raised through the issue of mandatorily convertible bonds. • Emilio Botin underlined the benefits of the transaction for Santander, asserting that the bank's "transformation into one of the largest and most profitable international financial institutions wouldn't have been possible if we hadn't taken full advantage of the opportunities that have arisen." Madrid, July 27, 2007 - The Extraordinary General Meeting of shareholders ofBanco Santander approved this morning the issue of capital instruments that willbe used to partially finance the acquisition of ABN Amro, as part of the offerpresented jointly with the Royal Bank of Scotland and Fortis on July 20. The EGMauthorized the Board of Directors to carry out a capital increase of EUR 4,000million through the issue of shares with preferential rights for Santandershareholders, as well as the issuance of EUR 5,000 million of mandatoryconvertible bonds. In a speech to the EGM, Banco Santander Chairman Emilio Botin said, "BancoSantander has become one of the biggest and most profitable internationalfinancial institutions. This transformation wouldn't have been possible if wehadn't taken full advantage of the opportunities that have arisen. Theagreements submitted to this Meeting enable us to count on part of the financingfor the ABN Amro acquisition, which, in the view of the Board, is a veryinteresting opportunity." Botin recalled that "this transaction involves and investment of EUR 19,900million by Banco Santander, which we intend to finance through these two issuesas well as EUR 10,900 million through balance sheet optimization and assetsales." The asset sales the sale of the stake in San Paolo-IMI, of pensionmanagement companis in Latin America and the sale and leaseback of Santanderproperties in Spain, which will generate capital gains of EUR 1,400 million. The Chairman said: "If the offer succeeds, Banco Santander would get thefollowing assets: Banco Real in Brazil, Banca Antonveneta in Italy and a smallconsumer finance business in the Netherlands, Interbank. We expect our EUR19,900 million investment to be reduced by around EUR 1,100 million through thesale of certain non-core corporate assets of ABN Amro, which we have access todue to our participation in the Consortium." Botin also underlined the transaction's benefits for Santander. "Through theacquisition of Banco Real, we would become the third bank in Brazil by branchnetwork and loan volume, benefiting from the economies of scale generated byintegration with Banespa, given the geographical and business complementaritybetween the two franchises. In Italy we would buy a bank through which we couldgrow organically in that country. In the Netherlands, Interbank and DMC ConsumerFinance would be integrated into Santander Consumer. "These are markets we know well and where we can create value throughimprovements in efficiency and business growth, together with low execution riskdue to our experience in integrating businesses both in Europe - Totta and Abbey- and Latin America, where we have the good examples of Brazil, Mexico andChile." Botin recalled that, under the current terms of the offer, the deal complieswith the Group's investment criteria: positive earnings per share from the firstyear and a higher return on investment than the cost of capital from the secondyear. He ended his speech thanking the Bank's 2.3 million shareholders for theirtrust. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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