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Sunday 08th of March 2009
January 3, 2008

Alliance & Leicester shares soar after takeover talks resume


by Kay Murchie
”Alliance

Spanish bank Santander, who took over Abbey National in November 2004, was believed to be in negotiations to buy mortgage bank Alliance & Leicester (A&L) but talks faltered after both parties failed to agree a price, according to sources close to the group.

However, there are reports that takeover talks have resumed and shares in A&L rose 57p to 705p yesterday following the news. There has been speculation about the possibility of a takeover for over a year.

Shares in A&L fell 43% last year following the Northern Rock crisis. Many believed the former building society would follow in the footsteps of the crisis-torn bank as out of all the mortgage banks, A&L was seen by analysts as the most similar to Northern Rock.

Back in November, A&L tried to reassure investors when it said write-offs would be only £55 million and that it had funding in place for most of 2008 and arranged an expensive £4 billion credit facility with Credit Suisse.

Santander is now the world’s eighth-largest bank and has been on the lookout for acquisitions for some time. Emilio Botín, Santander’s chairman, said he wants to increase its presence in countries with sizeable stakes.

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