Alliance and Leicester to be Bought by Abbey Owners
July 14, 2008
A deal has been agreed for the UK’s Alliance & Leicester (A&L) to be bought out by Santander, a Spanish bank for approximately £1.26 billion.
Monday saw shares soar by nearly 50 percent after it was disclosed that A&L had received an offer by Santander. The offer of 317p per share from the Abbey National owner Santander has boosted the lenders value and will hopefully be completed by October 2008.
A&L is set to merge with Abbey once the takeover is complete and this has lead unions to worry about job losses. In these uncertain times, the FSA will be relieved with the merger as larger banks are stronger in the current market conditions.
Though with that said, the bigger banks do have too much power, with limited numbers of small banks to bring competition to the market.
The A&L shareholders have had the bid recommended to them and they will have to approve before the sale can go ahead. This offer seems viable however, while stuck in the middle of the credit crunch. Plus, preventing another Northern Rock saga is imperative.
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