Banco Santander wins battle for Banesto with pounds 1.4bn offer

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The Independent Online
MADRID (Reuter) - Banco Santander has won the battle for Banesto, the Spanish bank, after an auction by the Spanish government yesterday. Santander will pay 280.9bn pesetas ( pounds 1.4bn) for a 73.45 per cent stake in the bank, the Bank of Spain's governor Luis Angel Rojo said.

Santander paid 762 pesetas a share. The acquisition puts it among Europe's top 10 banks with assets of 18,600bn pesetas and 37,000 employees.

The Economy Minister, Pedro Solbes, said the award was a satisfactory one as the bank had shown it was a dynamic institution and was capable of generating sustained profits. Argentaria had offered 566 pesetas a share, and Banco Bilbao Vizcaya 667 pesetas a share.

The terms of the auction were that the decision would be based on price alone, provided a number of conditions were met.

These were that the winning bank retains at least a 30 per cent stake for four years, does not undertake any significant restructuring during that time and maintains the bank's identity.

The price compares with Monday's closing market level in Madrid of 755 pesetas, and is well above that expected by analysts.