- Response to 7 August 2019, letter from Banco Santander Spanish bank and subsidiaries.
- Subsidiaries are based in US, EU, LatAm including Banco Santander Mexico (San Mex).
- Santander seeking to acquire outstanding shares in Santander Mex via a tender offer.
- Acquisition is structured as dual exchange offer: one in US, other in Mexico exchange.
- Santander seeking application of Tier II relief pursuant to Rule 14d-1(d)(2) and Rule 14e-5(b)(11), so its dual exchange offers are exempt from certain SEC Rules.
- Rule 14e-1(c) requires payment of securities in tender offer be made promptly.
- Due to Spain registration rules, payment of securities to US holders would exceed the normal settlement periods applicable to stock exchange transactions in US.
- Rule 14d-10 requires equity tender offer be open to all security holders of class.
- As Mexico offer rules, like documentation, differ from US, not same offer open to all.
- Rule 14e-5 allows offeror purchases subject to tender offer pursuant such offer only.
- Dual exchange offer takes purchase of securities outside of scope of the US offer.
Tier II Relief
- Rules exemption for cross border tender offer if US holders own 40% or less securities offered (not counting ones offeror holds), and complies other US laws (Tier II relief).
- Santander offers meet Tier II relief requirements except for US ownership limitation.
- More than 47% of San Mex securities not owned by Santander owned by US holders.
- US offer settlement will happen no later than sixth business day after end offer period.
- US offer open to all holders of San Mex American depositary and all US holders of San Mex shares, and separate Mexico offer open to all San Mex holders wherever located.
- Santander may purchase securities tendered in Mexican offer during the US offer.
- Granted relief due to conflicts of law and facts set forth in letter; precedent for relief.