Royal Bk of Scot/Nat West
Banco Santander Central Hispano SA
29 November 1999
BSCH supports Royal Bank of Scotland's offer for NatWest
Banco Santander Central Hispano, S.A. ('BSCH') announces that it has reached an
agreement with the Royal Bank of Scotland Group plc ('RBS') to provide support
for the offer, announced today, by RBS for National Westminster Bank Plc
('NatWest') (the 'Offer').
BSCH is strongly supportive of the Offer announced by its British partner,
RBS, for NatWest to create a group with leading positions in a number of UK
banking markets. As RBS's strategic partner and largest shareholder with 9.64
per cent of its ordinary share capital, BSCH believes that this transaction will
create significant value for RBS shareholders. It also believes that the
enlarged group will, like BSCH, be well positioned to take advantage of the
future consolidation that BSCH expects to occur in the European banking market.
BSCH confirms that all its shares in RBS will be voted in favour of the
shareholder resolution of RBS upon which the Offer is conditional. Additionally,
under the agreement with RBS, BSCH will contribute to the financing of the
Offer, subject to its becoming unconditional in all respects.
In order to assist in financing the Offer, RBS and BSCH have entered into
conditional arrangements (the 'Share Issue') under which RBS will issue to BSCH
new ordinary shares with a value of £1.2 billion. In return, BSCH will issue new
BSCH shares with a value of £l.2 billion. The price of the shares to be issued
will be determined at market on completion of the Offer. BSCH has agreed to
effect a placing, on behalf of RBS, with strategic European banking partners of
BSCH, of the new BSCH shares to which RBS is entitled (the 'Placing'), to
ensure RBS will receive £1.2 billion in cash.
The agreement will enable BSCH to maintain a significant shareholding in the new
enlarged RBS group. The final shareholding of BSCH in the new group will depend
on stock market and exchange rate movements, but based on current prices it is
expected that BSCH will own around 6.5 per cent of the new group.
The Share Issue and the Placing will be conditional upon the Offer becoming
unconditional in all respects, and on, inter alia, the approval by the
shareholders of BSCH of the increase in its capital. BSCH's Board of
Directors will call an Extraordinary General Meeting of BSCH's shareholders,
which will be asked to approve resolutions authorising the increase in capital,
subject to the fulfilment of all other legal requirements.
BSCH has had a close relationship with RBS for over a decade and its decision to
increase its investment at this important stage in RBS's development
demonstrates BSCH's confidence in RBS's business and prospects. This further
investment by BSCH is part of its strategy of investment in European
financial institutions that are leaders in their markets. BSCH has a wide range
of such international alliances and believes that, in the future
consolidation of European banking, these will provide significant
opportunities to shape the global financial services market, for the
benefit of both shareholders and clients.
Commenting on the transaction, Don Emillo Botin and Don Jose Maria Amusategui,
the Co-Chairmen of BSCH, said: 'This is an enormously important and exciting
development for the banking sector both in the UK and in Europe as a whole. We
have total confidence in the ability of RBS's management team to achieve its
stated objectives. We are delighted to play our part as RBS's long term
strategic partner in helping to create what will be the fourth largest bank in
Europe by market capitalisation'.
Schroders advised Banco Santander Central Hispano in relation to this
transaction.
29 November 1999
For further information, please contact:
BSCH
Luis Abril, Executive Vice-President
Begona Elices, Deputy Senior Vice-President
Tel: 00 34 91 558 2815
Schroders, which is regulated in the United Kingdom by the Securities and
Futures Authority Limited, is acting for BSCH in relation to the Offer,
the Share Issue and the Placing and for no one else and will not be
responsible to any other person for providing the protections afforded to
its customers or for advising any other person in relation to the Offer,
the Share Issue or the Placing.
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