Abbey, A&L agree to £1.3bn deal

Santander, which bought Abbey four years ago for £8.5bn, will acquire
& Leicester
(A&L), UK’s ninth-biggest mortgage provider, for £1.3bn
or 299p a share.

Institutional shareholders immediately criticised the offer as too low. ‘They
are acquiring A&L on give-away terms. I would be amazed if no one else
counters with a higher offer in the next few months,’ David Cumming, head of UK
equities at Standard Life Investments, told The Times.

However, bankers were doubtful of a rival bid. An offer from any of the five
biggest UK banks would meet with resistance from the competition authorities for
consolidating the current account market, The Times reports. ‘It’s very unlikely
that any British bank will try to upset this Anglo-Spanish party,’ one banker

David Bennett, A&L chief executive, defended the offer, saying that,
despite speculation that A&L had rebuffed far more generous approaches from
Santander last year and Crédit Agricole the year before, ‘we only received one
offer…We weren’t seeking bidders [and] we haven’t had any other talks with any
other party’.

Further reading:

Alliance & Leicester takeover bid targets £65m in IT

The Times story

Related reading