The Journal, citing people familiar with the matter, said the two banks hope to have a deal in place by Monday, with Santander expected to pay roughly Sovereign's New York Stock Exchange closing stock price Friday of $3.81 a share. That would value Sovereign at about $2.53 billion, the Journal said.
Santander owns a 25 percent stake in Sovereign and speculation has mounted that the Spanish bank would seek to protect its investment by orchestrating a takeover of the U.S. company.
In late September, Sovereign named former Chittenden Corp. chief executive Paul A. Perrault to replace Joseph P. Campanelli as CEO, effective Jan. 3.
Campanelli served as president and CEO since taking over from his embattled predecessor Jay Sidhu in 2006. Sidhu had made investors unhappy by negotiating the Santander stake sale without asking for shareholder approval.
Sovereign Bancorp is the parent company of Sovereign Bank, which has a major presence in the Northeast. The bank has 750 branches and about 12,000 employees.