Current Report No. 41/2013

27 November, 2013

Signing of an investment agreement among Bank Zachodni WBK S.A., Santander Consumer Finance S.A. and Banco Santander S.A. regarding the acquisition by Bank Zachodni WBK S.A. of shares in Santander Consumer Bank S.A., where the agreement qualifies as a significant agreement for Bank Zachodni WBK S.A.

The management board of Bank Zachodni WBK S.A. (the “Bank”) hereby announces that on 27 November 2013, the Bank, Santander Consumer Finance S.A. (“SCF”) and Banco Santander S.A. (“Banco Santander”) concluded an investment agreement (the “Agreement”) under which the Bank agreed, on the terms and subject to the satisfaction of the conditions precedent set out in the Agreement, to acquire 3,120,000 ordinary and privileged registered shares in Santander Consumer Bank S.A., with its registered office in Wrocław, registered in the Register of Business Entities of the National Court Register kept by the District Court for Wrocław - Fabryczna in Wrocław, VI Commercial Division of the National Court Register, under No. 40562 (“SCB”), with a nominal value of PLN 100 each, constituting 60% of the share capital of SCB and approximately 67% of the votes at the general meeting of the shareholders of SCB (the “SCB Shares”) (the “Transaction”). Pursuant to the Agreement, no later than three months following the completion of the Transaction, the parties shall use their best endeavors to waive the current privileges with respect to the shares in SCB to cause that the Bank will hold 60% of the shares in the share capital of SCB which constitute 60% of the votes at its general meeting.

On the terms and subject to the satisfaction of the conditions precedent set out in the Agreement, the Bank agreed to issue new shares in the Bank (the “New Shares”) which will be offered to and subscribed for solely by SCF as a consideration for an in-kind contribution constituting the SCB Shares. The value of the SCB shares as indicated in the Agreement is PLN 2,156,414,400. The number of the New Shares to be issued by the Bank as a consideration for the in-kind contribution constituting the SCB Shares will be established following the obtainment by the Bank of the KNF Clearance (as defined below) based on the following formula: quotient (rounded down to the nearest integer if the quotient is not an integer) of the value of the SCB Shares as indicated in the Agreement and the arithmetic mean of the average daily volume-weighted prices of the shares in the Bank during the three months preceding the reference day (being defined as the day of the first trading session on the Warsaw Stock Exchange following the obtainment of the KNF Clearance by the Bank).

The completion of the Transaction is conditional on certain conditions precedent, namely: (i) the issuance by the Polish Financial Supervisory Authority (the “KNF”) of an approval decision in accordance with Art. 25j of the banking law dated 29 August 1997 (the “Banking Law”) confirming that it has no objection to the direct acquisition by the Bank of shares in SCB representing more than 50% of the share capital and the votes in SCB (or, as the case may be, the lapse of the statutory time period for the KNF to raise objections to such acquisition) (the “KNF Clearance”); (ii) the KNF’s consent to the changes to the Bank’s statute regarding the share capital increase in connection with the issuance of the New Shares made in accordance with Article 34 section 2 in connection with Article 31 section 3 of the Banking Law; (iii) the issuance by an entity appointed by the Bank of a fairness opinion; (iv) the issuance by a court appointed auditor of an opinion issued in compliance with Article 312 in connection with Article 431§7 of the Commercial Companies Code dated 15 September 2000 confirming, in particular, that the value of the SCB Shares is at least equal to the total issue price of the New Shares; (v) the adoption by the general meeting of the Bank of a resolution on the capital increase and respective changes to the Bank’s statue as a result thereof; and (vi) the delivery to the Bank by SCF of a leakage disclosure letter indicating the leakages that occurred in SCB and SCB’s capital group in the period between 30 September 2013 and the completion of the Transaction.

For the purpose of the Transaction J.P. Morgan Limited issued, on 27 November 2013, a fairness opinion to the management board of the Bank which constitutes an attachment to this report. Such opinion, which is neither the fairness opinion referred to in (iii) of the preceding paragraph nor the auditor’s opinion referred to in (iv) thereof, is limited to the fairness, from a financial point of view, of the consideration to be paid by the Bank in connection with the Transaction and does not refer to the underlying decision by the Bank to engage in the Transaction or to any other matter.

The Transaction is being executed in order to fulfill the commitment made by Banco Santander towards the KNF (and as reported by the Bank in the current report of the Bank No 38/2012 dated 4 December 2012) under which Banco Santander committed to use available means to cause SCB to become a subsidiary of the Bank by 31 March 2014.

The criterion for qualifying the Agreement as a significant agreement was the relation between the value of the SCB Shares to the value of the Bank’s own equity worth PLN 13,048,714,000 as at 30 September 2013. This indicates that the total value of the obligations arising from the Agreement exceed 10% of the Bank’s own equity.

Documents and Downloads

Legal basis:
§5 item 1 point 3) of the Regulation of the Minister of Finance dated 19 February 2009 on current and periodic information to be published by issuers of securities and the conditions for recognising as equivalent information the disclosure of which is required under the laws of a non-member state.

Santander Bank Polska S.A. with its registered office in Warsaw, al. Jana Pawła II 17, 00-854 Warszawa, registered by the District Court for the capital city of Warsaw, 12th Commercial Division, set up under regulation of the Council of Ministers of 11 April 1988 on setting up Bank Zachodni in Wrocław (Journal of Laws of 1 July 1988, No. 21, item 142), registered under KRS number 0000008723, REGON 930041341, NIP 896 000 56 73, share capital of PLN 1,020,883,050 paid-up in full. Helpline: 1 9999 – fee as per the operator’s tariff.

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