Abbey 'to back £8bn bid from Spanish bank'
The board of Abbey National was today expected to back an £8bn (€12bn)-plus takeover bid for the group from a Spanish bank.
The group is expected to issue a stock market announcement shortly setting out details of the offer from Banco Santander Central Hispano (BSCH) and recommending it to shareholders.
Directors are understood to have spent yesterday afternoon in a meeting discussing the final details of the bid.
BSCH is expected to offer between 550p and 580p a share, valuing Abbey at more than £8bn (€12bn), although the final value of the offer will depend on the closing price of BSCH’s shares on the day the bid is tabled.
It is thought Abbey shareholders would be given shares in the new enlarged BSCH group under the deal and around 10% cash.
Shares in Abbey closed up 18% at 580p on Friday following confirmation that it was involved in talks, but the BSCH offer price represents a premium of around 40% on the 420p shares were trading at before takeover rumours boosted their price.
If the deal does go ahead it would create the fourth largest bank in Europe and the eighth largest in the world.
In 2001, Lloyds TSB failed in an £18bn (€27.3bn) bid for Abbey after the British government blocked the move on competition concerns.
Abbey has since shed jobs, sold non-core assets and reorganised its operations in a three-year overhaul designed to reverse two years of heavy losses.
It has insisted it would show a return to the black in the current financial year after losses hit £686m (€1bn) in 2003 and £947m (€1.4bn) in the year before that.
