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BTIG's Mark Palmer Talks Santander Consumer Holdings USA Buyout Rumor Talk

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Shares of Santander Consumer USA Holdings Inc SC briefly spiked as high as $12.19 early Tuesday, and over $14 in the pre-market session.

A El Confidencial report attributes last Friday’s brief spike to near $13 and Tuesday morning’s strong open to rumors of a potential buyout.

Both Friday and Tuesday’s price spikes in Santander Consumer USA Holdings were short-lived, as the stock closed at $11.85, down 0.4 percent.

BTIG’s Mark Palmer told Benzinga that most of the buyout buzz comes from speculation that parent company Banco Santader, S.A. (ADR) SAN could potentially buy back its U.S. subsidiary. Santander Consumer USA Holdings specializes in auto loans and other unsecured consumer lending products in the United States.

Related Link: The Largest M&A Spreads On The Market

According to Palmer, Santander Consumer USA Holdings may be better suited to operate as a private company. He noted that Banco Santander leadership has indicated in the past that the company intended to either straighten out its U.S. holding company’s business or sell it at some point.

Since going public in 2014 at $24 per share, Santander Consumer USA Holdings has been an abysmal investment. The stock is now down 50.66 percent from its IPO price and down 24.9 percent year-to-date. Parent company Banco Santander’s stock is up 4.6 percent in 2016.

Disclosure: The author holds no position in the stocks mentioned.

DateFirmActionFromTo
Apr 2016JP MorganUpgradesNeutralOverweight
Mar 2016Goldman SachsUpgradesNeutralConviction Buy
Mar 2016HSBCDowngradesBuyHold

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