LONDON â€" The Spanish bank Banco Santander said on Tuesday that it was looking to raise as much as $4.2 billion through the initial public offering of its Mexican unit.
The listing would be one of the largest ever I.P.O.'s in Mexico, and comes as the Latin American country's economy continues to grow on the back of strong local demand. At the same time, American depository receipts of the unit would list on the New York Stock Exchange.
The Madrid-based bank is planning to sell as much as 24.9 percent of Grupo Financiero Santander México, and has set the price range of between 29.00 pesos ($2.20) and 33.50 ($2.55) pesos a share, according to a regulatory filing released on Tuesday. Around 20 percent of the shares would be offered to Mexican investors, while the remaining stake would be sold to international investors.
The Mexican subsidiary is the country's fourth largest bank, based on assets, and had a total of $25 billion of outstanding loans, as of t he end of June.
The Spanish bank said a three-week roadshow for investors would start on Tuesday, and shares in Grupo Financiero Santander México would begin to trade in Mexico and New York by the end of September.
“We want to continue playing a part in the growth of Mexico,†Santander's chairman, Emilio BotÃn, said in a statement. “Our goal is to list our most significant subsidiaries within five years,â€
Money raised from the listing would help to strengthen Santander's capital reserves, according to a company statement. The Spanish bank has suffered from a struggling domestic market, which has buffetted by the European debt crisis.
Banco Santander reported a 93 percent drop in second-quarter profit, to 100 million euros ($126 million) as the Spanish bank set aside more money to cover bad loans in its home market.
Santander, UBS, Bank of America Merrill Lynch and Deutsche Bank are coordinating the I.P.O.
