4th Apr 2006 08:53
Banco Santander Central Hispano SA04 April 2006 MATERIAL FACT Banco Santander Central Hispano, S.A. (the "Bank) announces that the decision onthe arbitral proceedings being carried out in the Netherlands ArbitrationInstitute at the request of Total in connection with the tender offer launchedby the Bank on shares of Cepsa on September 25, 2003, has been notified to theparties today. The outcome of the decision can be summarised as follows: - The Arbitrator accepts the interpretation of the Third TransitionalProvision of Act 26/2003 of July 17 which was being maintained by the Bank.Accordingly, the Arbitrator considers that the agreements among Total and theBank to act in concert with respect to their investment in Cepsa becameineffective by operation of the above mentioned Third Transitional Provision.More specifically, the launching of the bid for Cepsa in September 2003, bymeans of which the Bank acquired a 12.13 % of the share capital of Cepsa did notconstitute a breach of Clause 6 of the Agreement entered into by Total and theBank in 1995. - Notwithstanding the foregoing, the fact that the Bank launched thetender offer without prior consultation with Total gave rise, in the opinion ofthe Arbitrator, to an irreconcilable difference between the parties that,pursuant to the part of the agreements which had not become ineffective, impliesthat Total has the right to repurchase from the Bank a 4.35 % of Cepsa at theprice stipulated in the agreements. - The Bank and Total must proceed to the winding up of Somaen Dos, S.L.(a holding company in which the Bank, Total and Union Fenosa, S.A. haveparticipations of approximately 60%, 25% and 15%, respectively). In this windingup, the Bank will receive from Somaen Dos, S.L. a 19.92 % of the share capitalof Cepsa and Total will receive an 8.31 % of the share capital of Cepsa. - Thus, the Bank consolidates its 27.7 % shareholding in Cepsa,approximately, after deduction of the 4.35 % which is subject to the repurchaserights of Total, in the case that such repurchase rights are exercised. Takinginto account the book value of the Bank's stake in Cepsa, a market price of euro45 per share of Cepsa, and the price stipulated for the exercise by Total of itsrepurchase rights over 4.35 % of the share capital of such company, theestimated unrealised capital gain of the Bank in Cepsa is of euro 1.3 billionapproximately. - The Arbitrator rejects the claims by Total that the Bank should: (i)bear the tax costs resulting from the separation of the holdings in Cepsa; (ii)return to the market the 12.13 % of the share capital of Cepsa acquired by meansof the tender offer in September 2003; and (iii) pay euro 500 million tocompensate moral damages. - Some matters will be addressed in a separate complementary decision:potential damages derived specifically from the non adherence to good faithprinciples, and the costs and expenses of the arbitration proceedings. - While the decision is executed, the cautionary measures previouslyadopted by the Arbitrator affecting the participation in Cepsa through SomaenDos, S.L. remain in place, but not in connection with the 12.13 % shareholdingacquired by means of the tender offer. Boadilla del Monte (Madrid), April 3 ,2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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