Santander Agrees Deal To Buy Troubled UK Lender

Fri, 18 Jul 2008

Spanish bank Santander has agreed to buy UK lender Alliance and Leicester in a deal worth £1.3 billion.

The bank, which owns Abbey, has offered one share for every three of A&L and a cash dividend of 18 pence per A&L share .

Shares in Alliance and Leicester had plummeted due to the credit crunch but rose nearly 50 per cent after bosses revealed the company was "at an advanced stage of discussions" over the potential 299p-a-share offer .

Stockbrokers said the deal will help stabilise one of Britain's weaker lenders and provide a welcome vote of confidence in the UK's worn down financial system.

A&L has struggled to cope with the impact of the global financial turmoil, which has seen it relegated from the FTSE 100 Index this year.

Although the bank said in May that it had enough funding to see it into the second quarter of 2009, experts stress that being part of a larger group will give it a stronger financial platform in the more uncertain conditions.
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