Santander values Mexican business at $8.65 billion on path to de-list

Annual results presentation at Santander headquarters in Boadilla del Monte, outside Madrid

By Jesús Aguado

MADRID (Reuters) -Santander valued its Mexican business at around 8.1 billion euros ($8.65 billion) on Tuesday with the launch of a voluntary tender offer to acquire the 3.76% of shares it does not own, taking a step towards its de-listing.

Over the past few years Santander has expanded in emerging economies in search of faster growth than in Europe, where ultra-low interest rates had made banking less profitable.

Spain's biggest bank set the offer price to Santander Mexico shareholders at 24.52 Mexican pesos ($1.28) in cash for each Series B share in Mexico and the U.S. dollar equivalent of 122.6 pesos in cash for each American Depositary Shares (ADS) listed in New York.

The offer values the stake which Santander does not already own at around 304 million euros ($325 million).

Although Tuesday's offer price was below the 26.5 Mexican pesos per share offered in October of 2021 for a 10.4% stake, Santander Mexico shares rose by 2.5% to 24.40 Mexican pesos.

Spain's Santander has to choose the highest price between book value or the average price of the last 30 days to set the offer according to the Mexican legislation.

After the end of the tender offer, which is expected to remain in place until March 8 but could be extended, Santander intends to de-list the shares in Mexico and the United States.

Santander's Madrid-listed shares rose 1.8%, outperforming Spain's blue-chip index Ibex-35 which was flat.

The offer comes as Banamex, the unit that encompasses the retail operations of Citigroup in Mexico, is up for sale. Santander was at one stage interested but has since dropped out.

However, Grupo Mexico recently secured a $5 billion debt package for a potential acquisition, according to people familiar with the matter, which would value Banamex at between $7 and $8 billion.

($1 = 0.9364 euros)

(Reporting by Jesús Aguado; additional reporting by Matteo Allievi, Tiago Brandao, Natalia Siniawski; Editing by Emma Pinedo and Alexander Smith)