Banco Santander SA, Spain’s biggest bank, said it agreed to acquire beleaguered U.K. mortgage lender Alliance & Leicester Plc for GBP 1.26 billion ($2.6 billion), Bloomberg reports.
Alliance & Leicester rose as much as 54%, the most since the company went public in 1997, after the bank said in a statement today it’s in “advanced” takeover talks.
Santander Chairman Emilio Botin is bidding for Alliance & Leicester after buying Abbey National, the UK’s second-biggest mortgage lender, for GBP 9.2 billion in 2004. Alliance & Leicester lost half its market value this year after Britain’s worst housing market in more than 15 years and credit writedowns forced it to abandon the 2008 profit target.
“Santander is a deal-machine focused on costs savings,” says Simon Maughan, a London-based analyst at MF Global Securities Ltd. who has a “hold” rating on Alliance & Leicester. “It’s been looking at increasing its returns in the UK, which are lower than anywhere else in the world. Whenever it looks to increase returns, it does so by acquisition.”
Santander rose 0.5% to EUR 11.29 in Madrid, giving the bank a market value of EUR 70.1 billion, the second largest in Europe after London-based HSBC Holding Plc.
The full article is available at the Bloomberg web-site.