- Proposal to reduce 2015 dividend to €0.20 in 4 installments (1 scrip, 3 all cash)
- Shares quotation suspended in Spanish stock exchanges (communicate - EN) to restart tomorrow 08:30 (Communicate - EN)
- Guidance for Q4 2014 (communicate - EN)
€5.8bi for full 2014, less 4.36 to September gives the puny €1.44bi for Q4 (€0.114 EPS, awful)
--- Presentation (ES), (EN)
This presentation summarizes best the earthquake
Additional information
- The CEO (Alvarez) discards utilization of the capital increase for a major acquisition (ES)No Espirito Santo, Monte dei Pasci, or Postbank. Belfius? Carige?
- Minimum price for capital increase is €5.72, 16.5% discount on last quotation in Madrid (ES)
We will know this Friday morning.
- New shares have been issued at €6.18, a discount of 9.78% (ES)
- Press release about the capital increase (EN)
Success! in 4 hours 11bi, from 235 privileged institutionals (79% from US/UK). 9.64% new shares. Shame and disgust. Long term confidence break.
- Big unknown is who are the buyers!
At least one is known: George Soros with €500mi (ES)
- A good coverage from reuters
- Outstanding article on SeekingAlpha (EN)
- Analysts moves:
ES and ES:
Société Générale: 7.3 to 7
RBC Capital Markets: 7.4 to 6.9
Oddo: 8.4 to 7.6
Nmas 1:7.65 to 6.8
Barclays: 5.8 unchanged
Citigroup: 7.1 to 6.7
CS: 7.1 to 6.6
- Shares.
Small investors dumped shares in Madrid on Friday, with volume in the range of 400mi (60mi is a normal day before the operations) and prices down 14%
This Monday (Jan 12th) situation is already much quieter. volume at 180mi, up 2.7% in a market down. Tuesday same.
This Wednesday is much quieter. Shares went ex-div (€0.146). And if you add that value to quotation (€6.03, around 10:30 CET), we are back to capital increase value €6.18!
The situation has basically changed. Expect favorable news in US/UK financial press, with support from institutionals
Reasons
This article from Segovia details the motivations for the operation.
No acquisition, no financing of organic growth (the official reason), not the consequence of market pressure.
Reason is the pressure from ECB to reach at least 10% tierI capital fully loaded now.
As additional comments, he states:
Professionals are very happy, small investors are not, and have been prejudiced in the operation.
On Jan10th, there is another article from Segovia. It details the dynamics of the operations (dividend cut and capital increase), and asks the question about the strategy, but without answering it
On Jan10th, there is another article from Segovia. It details the dynamics of the operations (dividend cut and capital increase), and asks the question about the strategy, but without answering it
Cold comments
- Strategy. (ES)
In 4 months, Ana Botin changed the board, the CEO, the dividend policy, and the way to get capital.
Organic growth. But probably more to come, especially the business mix and commercial policy.
In 4 months, Ana Botin changed the board, the CEO, the dividend policy, and the way to get capital.
Organic growth. But probably more to come, especially the business mix and commercial policy.
- Discount.
Increasing number of shares by 9.64% (Communicate - ES) with a discount of 9.78% against €7.5bi, is in fact no discount at all. Simply at same value of equity in each share.
Increasing number of shares by 9.64% (Communicate - ES) with a discount of 9.78% against €7.5bi, is in fact no discount at all. Simply at same value of equity in each share.
Heated comments
- We know now the real reason about CEO and members of the board changes.They were opposing the operation. €7.5bi capital increase reserved to instutionals is inconsistent with the message: "Santander has very comfortable capital levels" (even the above presentation in slide 7 reiterates that message on the numbers before the capital increase). But 10% new shares is just what is needed to change to controlling structure.
- Santander under Ana Botin is a different bank than under her father.
Why making the present to the institutionals (discount for new shares)?
Keeping scrip for FY 2015 and Q1 2016 would have had the same effect on capital with all its advantages for existing shareholders!
I wrongly evaluated Ana Botin. She is not going in the same direction as her father. She just transformed SAN to a common bank by handling control to institutionals . The 10% reserved for them is enough to switch the voting power. It is only the first step of a long series of moves. SAN will be moving to much shorter term. Ana Botin will stay chairman as long as the new controlling majority is pleased.
I HATE the new situation, because whilst I trusted Emilio Botin, I don't trust US/UK institutionals. Perhaps I am wrong on that, and that with them with more money in the game, SAN price will behave better. But they will want a biggest part of the shares first. So first a period of weak share prices, till they are happy with their holdings.
One word to resume:
Treason.
Treason to existing shareholders, and the end of Santander as it was since 1857.
Perhaps in 2-3 years shares will double value. But I prefer the previous situation.
There is now a basically different situation through a new controlling structure and new bank.
- I was so wrong. Most of opinions in the blog are so wrong that it makes low sense to go on with it. Simply maintaining notices
Own conclusion
- SAN.is no more an outstanding investment. Suddenly, by changing the long term plans, Ana Botin made SAN a plain fair(probably more good than fair, but all need to be reevaluated) banking investment.What will I do with my long position in SAN?
As told above, I expect shares to be weak, till institutionals succeed to increase the ownership to a higher level. In particular, Q4 figures will be bad. Guidance exists to help manipulation. That is the way to look at the coming financial statements. At longer term (2016 but not before), much better prospects. So I intend no big moves and close my ass.
Probably will sell 1% (of current position) every month, to reach 0 after 8 years.
It exists much better investment opportunities than the new Santander
