Santander Consumer USA to go private in $ 2.5 billion share buyback
Majority shareholder Santander Holdings will privatize major subprime auto lender Santander Consumer USA in a $ 2.5 billion deal, the two companies said on Tuesday.
Santander Holdings will pay $ 41.50 per share in cash under a deal unanimously approved by its board of directors. Shareholders will receive a premium of around 14% on the share price on July 1. Santander Holdings announced its initial non-binding proposal to buy the remainder of Santander Consumer’s shares on July 2.
The deal is expected to be finalized in the fourth quarter.
Santander Holdings initially offered $ 39 per share on July 2. At that time, it already owned around 80 percent of the shares in Santander Consumer. Based on the more than 306 million shares outstanding at the end of July, the acquisition of the remaining 20% would cost Santander Holdings around $ 2.54 billion.
“We believe our proposal reflects compelling value for public shareholders of SC,” wrote Santander Holdings chairman Timothy Ryan on July 2.
Less than a month after the proposal, Santander Consumer announced that it had achieved what CFO Fahmi Karam called “the most profitable quarter in the history of the company”. The company reported a net profit of $ 1.1 billion between April and June on July 28.
Santander also announced late last month that it would launch a digital car retail and finance platform in partnership with AutoFi.
In addition to its venture financing activities, Santander Consumer also operates Chrysler Capital, a private label Santander-Stellantis lending transaction.
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