Alliance and Leicester shares rise after reported takeover interest from Banco Santander

Source: Exec Digital UK

Date :03/01/2008 09:16:41

Shares in Britain’s seventh largest lender rise more than 16 percent after rumoured takeover interest from Spanish bank Banco Santander Central Hispano.

Almost £450 million was added to the A&L yesterday after speculation that Spain's Santander would make a bid for British lender.

Shares in A&L closed 106 pence higher at 754 pence, with the bank at the end of Wednesday worth almost £3.2 billion.

Renewed interest

Santander was in talks with the lender in December but after reportedly reaching an "advanced" stage but following concerns over price discussions waned.

These reports show that the lender - which demutualised ten years ago – is still an attraction.

Credit victim

Concerns about the impact of the credit crunch on liquidity have raised speculation amongst investors that the bank could be the "next Northern Rock.”

Fears about its funding position made A&L the worst-performing UK banking stock in 2007 after the embattled Rock with the lender having to secure an estimated £10 billion funding line.

Meanwhile, Santander has plenty of liquidity after making a £2.1billion profit following the acquisition of Italian banking group Antonveneta.

In 2007, Santander acquired the South American assets of ABN Amro, as part of the Royal Bank of Scotland -led consortium takeover of the Dutch bank.

January 03, 2008