Banco Santander Sets Pricing Of Capital Increase At 6.18 Euros/share

(RTTNews) - Spanish commercial bank Banco Santander S.A. (BNC.L, BSBR, SAN) said Friday that it has set the final terms and conditions of its capital increase of 7.50 billion euros to be implemented through an accelerated bookbuilding offering. The share sale is part of the company's efforts to bolster its capital position.

Santander, which is estimated to have a weak balance sheet compared to its European peers, said Thursday that an extraordinary meeting of its board of directors was convened to approve a capital increase, with the exclusion of pre-emption rights, for an amount of up to 7.50 billion euros. The company added that the transaction will be implemented through an accelerated book-building.

Banco Santander also said it will reformulate the dividend policy of the company, effective from the first dividend to be paid against the 2015 results, in order to distribute 3 cash dividends and a scrip dividend against such 2015 results. Each of these dividends will have an estimated amount of 5 euro cents.

Banco Santander said on Friday that the capital increase will be of a total par value of 606.80 million euros, through the sale of 1.21 billion ordinary shares of the company, each with a par value of 50 euro cents.

The company has set the issue price of the new shares at 6.18 euros per share, representing a discount of about 10 percent to the company's Thursday closing stock price on the Madrid stock exchange of 6.86 euros per share.

The total gross proceeds of the capital increase will amount to 7.50 billion euros. The new shares will represent 9.64 percent of Banco Santander's share capital before the capital increase and 8.8 percent of its share capital following the capital increase.

Banco Santander said it expects the authorisation for the admission to listing of the new shares on the stock exchanges of Madrid, Barcelona, Bilbao and Valencia to be granted on January 12, 2015, with the ordinary trading of the new shares on the aforementioned exchanges expected to start on January 13, 2015.

SAN is trading at $6.94, down $0.23 or 3.21 percent on a volume of 7.45 million shares.