LatAm Financial Site Buys Spanish Net Bank

FORT LAUDERDALE, FLA. (03/23/2000) - Patagon.com International Ltd., a high-profile financial services and information portal geared mostly towards Latin Americans, has acquired an online bank in Spain, which it plans to use to extend its services throughout Europe, the company announced today.

Patagon.com bought all the shares of Open Bank from Banco Santander Central Hispano SA, a Spanish bank that itself acquired a 75 percent stake in Patagon.com two weeks ago. [See "UPDATE - Santander Buys Stake in Patagon.com for $525M," March 10.]Open Bank was founded about 10 years ago as a bank that only operated by phone, and evolved into an Internet bank about three years ago, said Gabriel Politzer, Patagon.com's chief strategy officer, said in a phone interview today. Open Bank currently has about 250,000 customers in Spain, Politzer added.

The plans are to expand Open Bank's services portfolio to turn it into a "financial supermarket" like Patagon.com, so that it can offer not only banking services but also other types of financial products, such as online trading, credit cards, mortgages, and health and car insurance, from a variety of suppliers, he said.

"We're going to 'patagonize' Open Bank," Politzer said.

Patagon.com already has operations in Spain, and those will be merged with Open Bank, he added.

Banco Santander's online home banking service will continue to operate independently, however, because that Web site is narrower in scope, since it's only available to Banco Santander clients and only offers Banco Santander services, Politzer said.

As a result of the Open Bank acquisition, Patagon.com's market value is estimated now at US$2.6 billion, the company said in a statement issued today.

In addition to Spain, Patagon.com has country-specific sites for Brazil, México, Venezuela, Chile and Argentina.

Asked whether there's a danger that a fast-moving startup like Patagon.com will slow down now that it's controlled by a traditional bank, Politzer said that will not happen.

"Santander joined with Patagon.com because they like our model. If they were going to make us adopt their style, we would stop being Patagon.com and we would become Santander. And that would make for a very bad investment on their part. The point of all this is to let Patagon.com continue being Patagon.com," he said.

Banco Santander has over 24 million customers worldwide, and operations in 12 Latin American countries. Patagon.com, founded in 1997, has about 40,000 members and generates over 15 million monthly page visits, according to the company.

Patagon.com is part of a group of Internet startups focused on Latin America's portal market, such as Yupi Internet Inc., El Sitio Inc. and StarMedia Network Inc., who have managed to attract investments from venture capitalists. In December of last year, Patagon.com closed a $50 million-plus round of financing that involved J.P. Morgan Capital, Goldman, Sachs & Co. and General Electric Capital.

In acquiring its 75 percent stake in Patagon.com two weeks ago, Banco Santander bought the interests of all of Patagon.com's other investors. Patagon.com's top executive brass and founders kept the remaining 25 percent.

Patagon.com, based in Miami, can be reached at 1-305-534-3400 or at http://www.patagon.com/. Banco Santander Central Hispano, in Madrid, is at http://www.bsch.es/. Open Bank is at http://www.openbank.es/.

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