Spain’s Santander In Talks To Buy Wirecard Bank, Other Assets Out Of Bankruptcy

Even though auditors eventually determined that roughly 2/3rds of Wirecard’s revenue (including practically all of its Asian business) was fraudulent, there are still a few businesses and assets, including Wirecard’s former European banking unit, and its payments software, that have been deemed valuable. And the company’s German bankruptcy trustee has been working to sell these businesses off piecemeal, with buyers lined up to buy WC businesses in Brazil and elsewhere.

Now, Bloomberg reported Monday that Spanish bank Santander is in late-stage talks to buy Wirecard Bank, a small European lender run by Wirecard, along with some smaller subsidiaries, in what is shaping up to be the biggest deal involving former Wirecard assets, marking “the final step” of the bankrupt former tech darling’s dissolution.

Banco Santander SA is closing in on a purchase of Wirecard AG’s core business, according to people familiar with the matter, a move that would mark the final step of the failed German payment processor’s wind down.

The Spanish bank is likely to sign an agreement to acquire the main unit of Wirecard, which includes Wirecard Bank, as well as a few smaller German subsidiaries within the next couple of days, the people said, declining to be identified because the information is private.

No decision has been made and other bidders may restart discussions, they said. Lycamobile Ltd. is a potential suitor, according to earlier press reports. Santander declined to comment.

That Santander had been in talks with Wirecard was widely known. Following Wirecard’s demise, it came out that the company at one point was in talks to buy Deutsche Bank, part of a scheme hatched by Wirecard CEO Marcus Braun to try and obscure a ~$2 billion revenue hole in the company’s balance sheet.

Though consolidation is the order of the day in the banking sector – in the US as well as Europe – the decision to buy Wirecard is certainly curious.

Santander may pay substantially more than the 100 million euros ($120 million) that the insolvency lawyer, Jaffe set as a minimum price, the people said. The other Wirecard operations in the possible sale include the acquiring and issuing business as well as the firm’s payment processing software.

Santander will likely continue Wirecard Bank’s operating business, the people said.

Since Wirecard failed in the summer, the firm’s insolvency lawyer has sold off its assets in pieces. The North American business was bought by to Syncapay, Inc. and the sale of its Brazil unit to PagSeguro is expected to close by the end of the month.

While German regulators will probably be relieved to get rid of these assets, we can’t help but wonder about Santander’s motives, especially since Bloomberg seems to suggest that it won’t get much of a deal on the assets.