€2.3bn offer report fuels Abbey speculation
Speculation surrounding the future of Abbey National continued today with reports that Bank of Ireland is planning to offer shareholders up to €2.3bn cash as part of its merger proposal.
The bank, which unveiled plans to create a combined bank on October 7, is expected to reveal the full scope of its proposals early this week.
It is thought the deal would value Abbey’s shares at around 750p each, compared to Friday’s closing price of 622p.
The combined bank would be listed on the London Stock Exchange, with secondary listings on other markets including Dublin.
The announcement is also expected to detail potential cost savings the two groups could make through a merger, and these are expected to come in at around €474m.
Abbey has already rejected Bank of Ireland’s initial approach, claiming it was “not in the best interests of shareholders”, but Bank of Ireland will hope the cash sweetener may change this.
Abbey has long been seen as a take-over target, and it also emerged last week that National Australia Bank, which owns Clydesdale and Yorkshire Banks, had pursued the group.
NAB confirmed it had made a take-over approach, but added that discussions did not result in any agreement and had now ceased.
Abbey has also previously failed to secure a merger with Bank of Scotland, and fought off an approach by Lloyds TSB, which was eventually blocked by the Government and effectively meant other UK clearing banks would be prohibited from bidding for the group.
The bank, whose share price has collapsed from more than £11 earlier this year, declined to comment on the speculation surrounding Bank of Ireland’s expected proposal.
