Alliance & Leicester shareholders to vote on takeover

Tuesday, 19 August 2008 12:00

Alliance & Leicester shareholders are set to vote of the future of the bank and the proposed takeover by Spanish Abbey-owner Banco Santander.

Voting packs are being sent to shareholders following the £1.3 billion bid, which is recommended by the Alliance & Leicester board.

Under the deal Alliance & Leicester ordinary shareholders will receive one new Banco Santander Share for every three Alliance & Leicester Shares.

The deal values shares at 317p and with an 18p dividend make the offer worth 335p per share.

This is 52.6 per cent over the Alliance & Leicester share price before the deal was announced. The current share price is at 325p - compared with 52-week high of 334.25p.

Roy Brown, acting Alliance & Leicester chairman, said: "The proposed acquisition would bring together in the same group two well known UK banks and create a more effective competitor in UK financial services.

"The A&L Board believes that the combination of A&L and Abbey (Banco Santander's UK subsidiary) is an excellent fit.

"The combined business in the UK will have 959 branches, a larger and therefore more competitive market share of key personal financial service products and a growing business banking franchise, with Banco Santander providing additional stability and resources to leverage A&L's franchise."

Votes must be received by 11.00 a.m. on Sunday, September 14th and can be made by post, online or in person.

Earlier this month Alliance & Leicester reported a 99 per cent fall in profits due to the ongoing turmoil in the financial sectors.

The mortgage lender saw statutory profit before tax fall to just £2 million for the first six months of 2008.

This compares to a figure of £290 million recorded for the same period of 2007.

• Tags:
• investment advice
,
• news