Monday July 14, 11:00 AM
Santander In A&L Takeover Talks
By Sky News
Spanish bank Santander is in £1.25 billion talks to buy UK lender Alliance & Leicester, according to sources quoted by the Reuters news agency. The Spanish bank, which owns Abbey, reportedly had discussions with A&L earlier this
year.
Shares in A&L had been hammered by the credit crunch but jumped almost 50% after it said it was "at an advanced stage of discussions" over the potential 299p-a-share offer.
Investors would also gain an 18p dividend, taking the total value of the offer to above £1.3 billion.
Any Santander takeover could cause competition concerns due to its ownership of Abbey.
The discussions come as A&L struggles with the impact of the global financial turmoil, which has seen it relegated from the FTSE 100 Index this year.
Shares have fallen on fears that its lack of scale would cause it to face the same funding difficulties as Bradford & Bingley and Northern Rock.
Although the bank said in May that it was funded into the second quarter of 2009, being part of a larger group would give it a stronger financial platform in the more uncertain conditions.
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