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Banco Santander enters Canada

Staff writer |
Banco Santander has reached an agreement with the auto financing company Carfinco to acquire its Canadian business for CAD 298 million (approximately EUR 210 million).

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Santander will pay CAD 11.25 in cash per share, representing a premium to shareholders of 32% above the volume-weighted average price over the last 90 trading days.

As part of the agreement, Carfinco will also pay a special dividend to shareholders on the closing date. The amount of the special dividend will be determined closer to the closing date and is subject to necessary approvals. Carfinco’s board of directors has approved the transaction and will recommend that shareholders vote in favor. The transaction remains subject to regulatory approvals.

Carfinco is one of the main auto financing companies in Canada and trades on the Toronto Stock Exchange. It is headquartered in Edmonton, Alberta, and operates in all 10 Canadian provinces. Its products are distributed through a network of 2,200 dealers, and the Company has a geographically diverse loan portfolio of CAD 278 million and 29,500 customers as of June 2014.

Under the transaction’s structure, a new company will be formed in which Santander will own approximately 95% of the equity, while top management of Carfinco, including the president and CEO, will retain the remaining 5% and will maintain their management roles.

Prior to the closing of the transaction, Carfinco will sell its subsidiary Persian Acceptance Corp. (PAC), which develops the same activity in the United States.

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