Securities Exchange Act of 1934
Exemptive Letter: Exchange Offers by Banco Santander, S.A. for all outstanding shares and units of Banco Santander (Brasil), S.A.
September 18, 2014
Response of the Office of Mergers and Acquisitions
Division of Corporation Finance
Banco Santander, S.A.
Incoming letter dated September 18, 2014
Marc O. Williams, Esq.
Davis Polk & Wardwell, LLP
450 Lexington Avenue
New York, NY 10017
Re: Banco Santander, S.A., Exchange Offers
Dear Mr. Williams:
We are responding to your letter dated September 18, 2014, addressed to Michele M. Anderson, Christina Chalk and Mellissa Campbell Duru, as supplemented by telephone conversations with the staff, with regard to your request for exemptive relief. To avoid having to recite or summarize the facts set forth in your letter, we attach the enclosed copy of your letter and the accompanying letters from Spanish and Brazilian counsel. Unless otherwise noted, capitalized terms in this response letter have the same meaning as in your letter dated September 18, 2014.
On the basis of the representations and the facts presented in your letter, the United States Securities and Exchange Commission hereby grants an exemption from:
- Rule 14e-1(c) under the Exchange Act to permit payment for Santander Brasil Securities tendered into the U.S. Exchange Offer during the initial offering period to be made as promptly as practicable and no later than the tenth business day after the expiration of the initial offering period and to permit payment for Santander Brasil Securities tendered into the Brazilian Exchange Offer to be made on the fourteenth Spanish and Brazilian business day following the expiration of the initial offering period;
- Rule 14d-11(c) under the Exchange Act to permit Santander Spain to provide for a subsequent offering period where payment for securities tendered during the initial offering period will occur in the time periods described above;
- Rule 14d-11(e) under the Exchange Act to permit Santander Spain to bundle Santander Brasil Securities tendered during successive periods of 13 business days during the possible three-month subsequent offering period. Payment for Santander Brasil Securities tendered during any subsequent offering period will occur as promptly as practicable and no later than the tenth business day following the end of each such bundling period. Holders of Santander Brasil Securities who tender during any 13 business day period will have withdrawal rights until the end of that period;
- Rule 14d-10(a)(1) under the Exchange Act to permit the making of the Exchange Offers in the manner set forth in your incoming request letter. This exemption permits the use of a dual offer structure whereby Santander Spain will make a U.S. Exchange Offer available to all holders of Santander Brasil ADSs and all U.S. holders of Santander Brasil Units and Santander Brasil Shares. The Brazilian Exchange Offer will be open to all holders of Santander Brasil Units and Santander Brasil Shares, including U.S. holders. In granting this relief, we note your representation that under Brazilian law, Santander Spain cannot exclude U.S. holders from the Brazilian Exchange Offer. Appropriate disclosure about the risks to U.S. holders associated with participating in the Brazilian Exchange Offer will be included in the U.S. offer materials; and
- Rule 14e-5 under the Exchange Act to permit Santander Spain to purchase Santander Brasil Securities tendered pursuant to the Brazilian Exchange Offer during the U.S. Exchange Offer. You do not request and we do not grant any relief regarding purchases or arrangements to purchase Santander Brasil Securities otherwise than pursuant to the Exchange Offers.
In granting the exemptive relief described above, we further note:
- the numerous procedural and ministerial steps that must be followed in connection with a share issuance by a Spanish company and the associated need for additional time to pay for tendered shares in the Exchange Offers; and
- your representations regarding the additional time for payment of securities tendered during the initial offering period in the Brazilian Exchange Offer required under the Brazilian clearing system.
The foregoing exemptive relief is based solely on the representations and the facts presented in your letter dated September 18, 2014, and the accompanying letters from Spanish and Brazilian counsel of the same date and does not represent a legal conclusion with respect to the applicability of the statutory or regulatory provisions of the federal securities laws. The relief is strictly limited to the application to this transaction of the rules listed above. You should discontinue this transaction pending further consultations with the staff if any of the facts or representations set forth in your letter change. In addition, this position is subject to modification or revocation if at any time the Commission or the Division of Corporation Finance determines that such action is necessary or appropriate in furtherance of the purposes of the Exchange Act.
We also direct your attention to the anti-fraud and anti-manipulation provisions of the federal securities laws, including Sections 10(b) and 14(e) of the Exchange Act and Rule 10b-5 thereunder. Responsibility for compliance with these and any other applicable provisions of the federal securities laws rests with the participants in this transaction. The Division of Corporation Finance expresses no view with respect to any other questions that this transaction may raise, including, but not limited to, the adequacy of the disclosure concerning, and the applicability of any other federal or state laws to, this transaction.
For the Commission,
For the Division of Corporation Finance
pursuant to delegated authority,
Michele M. Anderson
Chief, Office of Mergers & Acquisitions