Money News
Alliance & Leicester (A&L) has accepted a three-for-one share swap takeover bid from Abbey's Spanish parent Banco Santander. The takeover values A&L at £1.3 billion. Santander will invest a further £1 billion to help repair the bank's battered balance sheet.
At 08.14 am this morning A&L released a statement to the London Stock Exchange confirming that it was "at an advanced stage of discussions regarding a possible offer at an offer price of 299p per share together with the right to receive an interim dividend of 18p per share which is expected to be declared in the ordinary course comprising total value of 317p per share".
At that stage, the name of the potential bidder was not disclosed but the secret was swiftly out and it was only a matter of hours before Alliance & Leicester succumbed to Santander's Spanish charms. The combination of A&L and Abbey, the first building society to demutualise, will create the UK's second largest mortgage lender behind HBOS. Together the two groups will have 959 branches, although there will no doubt be some closures.
The mortgage bank's shares reacted in predictable initial fashion to the takeover offer, showing their largest upward move since A&L came to the market in 1997. Alliance & Leicester had been the second-worst performing bank stock this year but the loss for the year has been virtually cut in half by today's gains. The news of the bid approach also sent Bradford & Bingley
14 July 2008 © Moneyextra.com
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