| SAO PAULO
SAO PAULO Units of Banco Santander Brasil SA (SANB11.SA) are valued between 10.63 reais and 11.69 reais, a report by investment-banking firm NM Rothschild & Sons showed, below the price that the lender's parent company proposed for a planned buyout less than two months ago.
The midpoint value of the units was estimated by a team of Rothschild bankers at 11.16 reais, the report showed. That price is 37 percent below Spain's Banco Santander SA's (SAN.MC) proposal of 15.31 reais per share for the buyout made on April 29.
The report was elaborated upon at Banco Santander's behest.
Santander launched a $6.5 billion offer for the 25 percent of its Brazilian unit it does not already own. Under terms of the proposed deal, minority investors in Banco Santander Brasil SA (SANB11.SA) would receive up to 665 million shares of the Madrid-based lender in a voluntary swap.
The proposal still has to be voted by Santander Brasil shareholders.
Units of Santander Brasil - a blend of common and preferred shares of the Sao Paulo-based bank - have gained 13 percent since the buyout was announced, underscoring the potential success of the deal. The buyout marks an exception to the Spanish behemoth's strategy of recent years of listing foreign units whenever possible to raise cash.
The Rothschild study, which also included estimates for the fair value of Banco Santander and terms of the swap, reached conclusions similar to those made by analysts covering Santander Brasil, who said the buyout proposal is above what is considered to be Santander Brasil's standalone fair value.
Investors expect the deal, which executives hope to conclude by October, to succeed. Qatar Investment Authority, the Gulf country's sovereign wealth fund, is among shareholders of Santander Brasil.
(Reporting by Guillermo Parra-Bernal; editing by Andrew Hay and G Crosse)