Santander takes overAbbey National

26th July 2004, Comments 0 comments

26 July 2004, LONDON - The board of Britain's mortgage bank Abbey National announced Monday a takeover by Spain's largest bank, Santander Central Hispano (SCH). SCH had reportedly made a formal offer Sunday to buy Abbey National, Britain's sixth biggest bank.

26 July 2004

LONDON - The board of Britain's mortgage bank Abbey National announced Monday a takeover by Spain's largest bank, Santander Central Hispano (SCH).
 
SCH had reportedly made a formal offer Sunday to buy Abbey National, Britain's sixth biggest bank.

Abbey formally recommend the takeover bid to its shareholders in a statement sent to the London Stock Exchange Monday at 0600 GMT.

Details of the Spanish offer were not immediately known but British press reports put it at GBP 8.5 billion (EUR 12.9 billion, USD 15.6 billion), or between 550 and 580 pence for each Abbey share.

A deal between the two institutions will create Europe's fourth-largest bank, behind HSBC, the Royal Bank of Scotland and UBS, the largest in the eurozone and the eighth-biggest worldwide.

Speculation has been rife in recent days that a takeover bid was imminent.
 
Reports suggested that any bid would have to be cleared by the Spanish stock exchange authorities.

SCH would most likely raise the cash for the offer through a capital hike and selling off stakes it holds in other companies.

On Friday, Abbey National shares closed in London up 87 pence or 17.65 percent at 580 pence, while SCH fell 4.08 percent to EUR 8 ahead of an earnings report due out on Wednesday.

The British home-loan specialist is struggling to return to profitability after two years of heavy losses fuelled by soaring bad debt at the company's wholesale banking unit.

Banco Santander Central Hispano (SCH) emerged five years ago from the merger of the Santander and Central Hispanoamericano banks to create the country's largest banking group and one of Europe's biggest, with the group comprising 103,000 employees in 2003, a third in Spain.

The company has an estimated 22 million customers in 30 countries and about 9,000 branches.

SCH posted a record net profit last year of EUR 2.61 billion.
  
[Copyright EFE with Expatica]

Subject: Spanish news

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