Santander Brasil (SANB11.SA): Exchange Offer: More value for Madrid than for São Paulo

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Santander Brasil (SANB11.SA): Exchange Offer: More value for Madrid than for São Paulo

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30 Jul 2026 20:00:51 ET │ 10 pages

Santander Brasil (SANB11.SA)

Exchange Offer: More value for Madrid than for São Paulo

CITI'S TAKE

Neutral Santander Spainannounced a voluntary exchange offer to acquire the

~10% free float of Santander Brasil, offering Banco Santander (Spain) Price (30 Jul 26 18:00) R$25.25

shares through BDRs/ADSs at an implied 15% premium to SANB11's Target price R$27.00

closing price. The transaction does not seek to de-list Santander Brasil Expected share price return 6.9%

from B3 and is not subject to a minimum acceptance condition. We view Expected dividend yield 6.2%

the proposal as strategically attractive for Santander Spain mostly. On Expected total return 13.1%

the positive side: SANB11 shareholders crystallize value at a premium and

Market Cap R$94,669M gain exposure to a larger, more diversified global banking franchise, while

US$18,500M Santander uses a higher-valued currency to increase ownership of a core

growth asset. Based on our estimates, the deal implies a valuation of ~1.1x

P/BV for SANB, above its undisturbed valuation (~1.05x) but still below

Banco Santander's own valuation (~1.55x P/BV), suggesting the Gustavo SchrodenAC

transaction should be accretive for the parent. +55-11-4009-5858

gustavo.schroden@citi.com

On the negative side (mostly for Brazilian minority shareholders), while the 15% Brian Flores, CFA

premium may appear compelling enough to force immediate acceptance, we note +55-11-4009-2842

that SANB's price has fallen post 2Q26 results, making the pre-result premium luis.brian.flores@citi.com

only ~5%. Moreover, we believe the structure increasingly puts minority

Arnon Shirazi, CFAshareholders in a difficult position.