Jul 20, 2008
The British bank Alliance & Leicester
The British bank Alliance & Leicester ) (A & L) was determined Monday to sell without discussion at Santander (Madrid: SAN.MC - news) to escape the gloomy economic climate in the United Kingdom, restoring color market while allowing the Spanish to further strengthen its position in the UK market.
A & L, the seventh British bank by capitalization, and Santander, world number six and number one European, have announced their marriage almost against all odds.
The Spanish, already owner since 2004 of bank Abbey, proposed a total of 1.33 billion pounds (1.66 billion euros) for A & L, or 299 pence and 18 pence semi-annual dividend per share.
The offer provides a premium of 44.6% compared to its closing price on the stock exchange Friday evening, but the British merely an exchange of shares, three A & L shares for an action Santander, with no part in cash.
But A & L did not fine the mouth while the British economy is threatened by recession, and that banks are under pressure, particularly those oriented towards a housing market bubble that has just exploded, with transactions at a standstill at the moment.
As Northern Rock and Bradford & Bingley, A & L is an old "building society", these mutual involving the origin of individuals uniting their funds to build their houses, a number of which were introduced on the stock market in 80 years.
Northern Rock (London: GB0001452795.L - news) was the first casualty of the credit crunch in September, and had to be nationalized in February, while Bradford & Bingley is very difficult to carry out a capital increase 400 million pounds.
The situation of A & L is better - it is not engaged in a capital increase at this time - but its value has been divided by five to one year.
Roy Brown, interim president of A & L - the new president, Northern Ireland-Alan Gillespie arrived in September - noted that the board had given its green light because he is "fully aware of external risks brought about by the significant deterioration in market conditions and persistent turbulence in financial markets. "
The British Prime Minister Gordon Brown himself had the air rather satisfied with this conclusion, it avoids a new business Northern Rock. "We have an open economy in the United Kingdom," he commented at his monthly press conference.
For its part Santander will gain a little more in the United Kingdom, where she had made an entry in 2004 breaking the bank buying Abbey.
It seems one of the banks in the world overcome the crisis better, having digested without incident last year acquired the Dutch ABN Amro, in association with RBS (London: RBS.L - news) and Fortis (Amsterdam: FOO.AS - News).
Between them both, A & L and Abbey will have 959 branches, representing a 7.6% share of the UK market, and an 8% share of savings and consumption loans, noted Santander. According to the broker Brewin Dolphin (London: BRW.L - News), Santander will also be number two behind HBOS mortgages (London: HBOS.L - News).
But that will not go without job cuts, warned Santander. A & L employs 7,300 people, Abbey 16,000.
The announcement of the acquisition has sparked a rush on the London Stock Exchange where the title A & L won up 54.5% Monday in a market boosted by various other rumours repurchase transactions.
To the extent that some commentators, though rare, well see an escalation on A & L, as Standard Life (London: SL.L - News), which held that Santander had made "a sumptuous affair" in buying A & L "to conditions gift"
by erectusplus at 7:17 AM |
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