Santander Sued by Pension Funds Over Short-Form Buyout Proposal

Four pension funds filed suit in Delaware over claims that Banco Santander SA’s U.S. unit plans to shortchange public investors when it buys out the last 20% of its American auto-loan division for $2.5 billion after the expiration of a tender offer Monday.

The separate lawsuits, docketed Monday and Oct. 1 in Delaware Chancery Court, concern a proposed short-form merger that would make the publicly traded auto-loan business, Santander Consumer USA Holdings Inc., a wholly owned subsidiary of Santander Holdings USA Inc.

There are indications that “the board failed to act with due care or in good faith to protect ...