* 110,000 retail shareholders of Popular could benefit-source
* Santander plans to issue up to 980 mln euros in perpetual bonds
* Estimates maximum costs at around 680 mln euros
* Does not see impact on earnings and/or capital (Adds details and background)
By Jesús Aguado
MADRID, July 13 (Reuters) - Spain's Banco Santander said on Thursday it would offer perpetual bonds as part of a commercial offer to compensate some retail clients who acquired shares and subordinated debt of Banco Popular and were wiped out when the bank was wound down.
Popular was taken over by Santander on June 7 for the symbolic price of one euro after European authorities stepped in to prevent its collapse.
The lender estimated the maximum cost of its initiative at 680 million euros ($775 million) and said its plan would have no impact on the group's earnings nor additional capital impact.
As part of its acquisition, Santander has launched a 7.1 billion euro rights issue.
Santander said that it had taken the decision given the "exceptional circumstances" and also for commercial reasons and to foster customer loyalty.
As part of the initiative, Santander said it was planning to issue up to 980 million euros nominal value of perpetual bonds.
Santander did not detail how many shareholders would be affected by its offer. A source with knowledge of the offer said more than 110,000 retail investors of Popular could benefit, around a third of its minority stakeholders.
Some retail investors and junior bond investors, affected by Popular's rescue, have already begun filing lawsuits to determine who was responsible.
Spanish and European authorities said that Popular needed to be rescued due its weak liquidity situation after a bank run.
In order to benefit from the offer, customers would be required to waive the right to pursue legal actions against Santander, the lender said.
Santander said that the plan excluded institutional investors and was directed at retail clients who acquired shares from May 26 to June 21 of 2016, during the period of Banco Popular's last capital increase of around 2.5 billion euros.
It would also include retail clients who acquired subordinated obligations computable as Tier 2 of the July 29, 2011 and Oct. 14, 2011 issues of Popular.
In both cases, the plan would apply to customers who had their investments deposited in any of the retail networks of the Popular or Santander at the time of the resolution.
Santander said that those who invested up to 100,000 euros would receive the total amount of the investment, which was the case of 99 percent of Popular clients and employees who bought shares during Popular's capital rights issue in 2016.
Members of the board of directors of Popular and major shareholders would be excluded from this plan, Santander said.
Banco Santander said it would register shortly a prospectus of the detailed bond offer with Spain's stock market regulator. ($1 = 0.8777 euros) (Reporting By Jesús Aguado; Editing by Emma Pinedo and Hugh Lawson)