HBOS considers £9bn Abbey bid

13 April 2012

BRITAIN‘S biggest mortgage lender HBOS is reportedly considering a £9bn counter-bid for its High Street rival Abbey.

A team from the banking group is this weekend weighing up the pros and cons of bidding for Abbey, which last week agreed an £8.5bn merger with Spain's biggest bank, Banco Santander Central Hispano.

HBOS refused to comment on the report in the Sunday Telegraph but an industry insider is quoted as saying that Abbey shareholders had sent ?a clear message‘ that they wanted the bank to make an offer.

UK institutional shareholders do not want to be saddled with Santander shares. ?They would much rather see an all-UK deal funded by our shares,‘ the source said.

HBOS, which was formed in 2001 from the merger of Halifax and the Bank of Scotland, is probably Britain‘s only major bank that could buy Abbey on competition grounds. Authorities blocked an £18bn takeover bid of Abbey from Lloyds TSB in 2001.

If the Spanish group buys Abbey, which still trades under its previous name Abbey National, it will be Europe's biggest cross-border banking takeover.

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