On September 16, Carfinco Financial Group Inc. announced that Banco Santander and its wholly-owned Canadian subsidiary, Acquireco, had reached an agreement to acquire the non-prime vehicle financing firm.
Pursuant to the agreement, each Carfinco shareholder will receive cash consideration of $11.25 for each common share of Carfinco, representing total equity value on a fully diluted basis of approximately $298 million. The cash consideration that Carfinco shareholders will receive under the Arrangement represents a 32.12 per cent premium to the 90-day volume-weighted average share price ending September 15, 2014 (the last trading day prior to the announcement of the arrangement). The arrangement is expected to close in the fourth quarter of 2014.
In conjunction with the arrangement, Carfinco has also agreed to declare and pay a special dividend, which will be payable to shareholders of record on the closing date. The amount of the special distribution will be determined closer to the closing date and is subject to necessary approvals.
Juan Rodriguez Inciarte, Senior Executive Vice-President and head of Strategy at Santander, said: “We are excited to sign this agreement with Carfinco, which allows us to enter a market with good growth potential such as Canada, where we hope to reach agreements with other car manufacturers like those we have signed in other countries.”
“We are delighted with the value this all cash offer of $11.25 per share brings to our shareholders,” said Tracy Graf, CEO of Carfinco. “We look forward to becoming a division of Santander, one of the top banks in the world, and recognize the benefits their wealth of knowledge, experience and relationships in the auto finance industry will bring to the Canadian market.”
