Santander Holdings USA is looking to buy the remaining 20% of its subprime auto lending arm, proposing to pay shareholders a premium to bring that business entirely under its umbrella.
In an SEC
Investors would get a 7.4% premium from Santander Consumer’s closing price Wednesday of $36.32. Santander Consumer’s stock climbed after the announcement and was up about 12% to $40.77 on Thursday afternoon.
The proposal is subject to approval from Santander Consumer’s board of directors.
“Given our knowledge of the company, we are in a position to proceed with the proposed transaction in an expedited manner,” Timothy Ryan, the chairman of Santander Holdings USA, wrote in a letter to Santander Consumer’s chairman.
The most likely path forward is that the proposal will be accepted, according to Kevin Barker, a Piper Sandler analyst. He noted that the Dallas-based auto finance business is the most profitable part of Santander’s U.S. operations.
Santander Holdings USA has 100% ownership of other U.S. entities, including a retail bank, a private bank and a broker-dealer arm, according to a recent investor
Grupo Santander said in its first quarter earnings