Santander Mexico's IPO Will Test LatAm Demand Chris Dieterich - WSJ.com
go to original September 24, 2012

Pedestrians walk by a Banco Santander bank branch in Mexico City. (Susana Gonzalez/Bloomberg)

After a mixed start to the end-of-summer season for the IPO market, an outsized offering from Banco Santander SA's Mexican unit will test investors' appetite for new listings tied to growth in Latin America, but with exposure to a leading Spanish bank.

Of four initial public offerings on tap this week, the biggest will be an offering from Grupo Financiero Santander Mexico SAB de CV, the Mexican arm of the Spanish lending giant and Mexico's fourth-largest bank by assets. The Spanish bank will sell a 25% stake in its Mexican unit. The deal, expected Wednesday, is scheduled to bring some 235 million American depositary shares to the New York Stock Exchange under the ticker symbol "BSMX." A concurrent offering will hit the market in Mexico City; each U.S.-traded share will represent five trading in Mexico. Together, the offerings will raise an estimated $4.2 billion for Banco Santander.

Among new U.S. listings this year, Santander Mexico will rank in size behind only Facebook Inc.'s $16 billion launch in May, according to Dealogic. It also will represent the largest new U.S. financial-sector listing since October 2009, when Santander Spain raised $7.5 billion in a similar dual listing of its Brazilian unit on the NYSE and in São Paulo. U.S.-traded shares of Banco Santander Brasil SANB3.BR -5.56% are down by one-third from the 2009 offer price of $13.50, closing Friday at $8.09.

Santander Mexico represents 12% of its parent's profit, and has a firm foothold in Latin America's second-largest economy by gross domestic product. The deal is expected to price at between $11 and $13 per ADS.

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