Abbey Nat. Share Discussion Threads

[kaibutsu] 26/7/2004 11:28

does anyone have the faintest idea what Brandes' cost price is????

[jillyann] 26/7/2004 11:27

Doesn't look like a bad deal to me.
Obviously compared to the £12+ per share that they were in the past it looks bad but compared to the recent prices it looks fine.
I'll take it, thanks.

[the knowing] 26/7/2004 11:27

So if ANL holders think they are being shafted then Santanders share should go up as they get a bargain.

People selling and linning the markets pocket with the current premium to share price.

[kaibutsu] 26/7/2004 11:26

that all depends on the santander share price. The bid value is a moving target and will reduce as santander's share price comes under pressure.

[eithin] 26/7/2004 11:25

Start trading again at 1300 UKtime. (From Bloomberg)

[mcel101] 26/7/2004 11:24

At present of course it's not possible to value the bid at all since Santander's shares appear to be still suspended:

(this page is in English)

[the knowing] 26/7/2004 11:23

Well anyone buying now gets an easy 40p profit barring any counter bid

[dvda] 26/7/2004 11:20

I think some of you need to take a step back and look at this logically. The 'fair value' for Abbey is probably in the 420 - 450 range. The recent price has been in the 480 - 500 range due to a bit of bid speculation. The bid is going to work out somewhere in the 550 - 600 range.

As an Abbey shareholder, you own something that is worth, say, 435, and are now being offered, say, 575. I'm sure if the board rejected this out of sight, there would be plenty of people on here moaning about the board looking after their own jobs and screwing shareholdes.

I think all they are doing is showing good corporate governance by taking this offer on board and putting it to the shareholders to decide. The offer being made represents a 20% - 30% premium over fair value, which is pretty much par for the course with takeovers.

Sure other banks have offered more in the past, but that was then and this is now. Abbey is not the same company it was 3 or 4 years ago, and the market it operates in has certainly moved on. With the exception of Mark Pain, all the current board are new faces, and as such were not involved with any prior bid rejections.

[jillyann] 26/7/2004 11:12

Thanks dvda, thats the way I saw it but with all the legal speak you sometimes miss things.
I think I will hang on for that and then take advantage of the free dealing arrangement to ditch the new shares.

[corpbull] 26/7/2004 11:11

jillyann
Not heard anything. Any bank's offer is surely better than present.
It is a stitch up!!! The deal is good for the directors not shareholders.
Time to sack the lot!!

[dvda] 26/7/2004 11:07

Jillyann

My reading would be 8.33p interim + 25p + 6p = 39.33p.

[bigface] 26/7/2004 11:06

Its a disgrace far too cheap - stitch up!!

[the knowing] 26/7/2004 11:04

(Updates with extra detail throughout)
LONDON (AFX) - British retail bank Abbey National PLC agreed an 8.5 bln stg
takeover offer from Spain's Banco Santander Central Hispano SA in a deal which
will create the world's tenth biggest bank by market value.
In a statement Abbey said Santander will pay one new SCH share and a special
cash dividend of 31 pence for each Abbey share.
With SCH's stock having been suspended in Madrid since Friday at 8 eur each,
that values Abbey's stock at 578 pence, or 584 pence taking into account a six
pence payment to eliminate the differential between the two companies'
dividends.
But dealers in Madrid expect SCH shares to fall sharply when trading resumes
at 11.45 GMT.
Abbey said the offer represents a 17.3 pct premium to analysts' assessment
two weeks ago of the stock's fair value -- 420 pence -- before offer talks were
confirmed.
Abbey shares skidded 34 pence, or 5.9 pct, lower to 546 as the value of
SCH's offer left investors underwhelmed.
The deal, which represents the biggest ever cross-border purchase of a
European retail bank, comes as SCH tries to diversify its earnings stream away
from Latin America where it has run into problems in recent years.
"Abbey's business will contribute to reinforce our pan-European franchise
and provides the group with a more balanced stream of earnings," SCH chairman
Emilio Botin said.
SCH earlier reported it made 1.91 bln net profit in the first six months of
the year, with Latin America contributing 35 pct of that total.
"Abbey's leading position in the UK mortgage market, combined with its
strong distribution network, represents... a value creating opportunity based on
the application of Banco Santander's commercial and technological best practices
to Abbey's banking operations," Botin added.
Abbey is Britain's second biggest mortgage lender.
Santander expects cost and revenue synergies will contribute 560 mln eur to
pretax earnings by the third year following completion of the transaction, which
is expected by the end of this year.
Abbey chief executive Luqman Arnold said "Banco Santander's proven ability
to operate successfully in a diverse range of countries and cultures bodes well
for the success of the combination."
Abbey said it agreed to pay Santander 81.7 mln stg in the event its
directors withdraw their recommendation, in an effort to deter other bidders.
Possible candidates include US financial services giant Citigroup Inc, and
UK rivals HSBC PLC and Royal Bank of Scotland PLC.
Lloyds TSB PLC may also be considering a counter-bid.
Abbey is seen as a much more attractive proposition after it reassured the
market earlier this month that its life assurance funds, managed by its Scottish
Mutual and Scottish Provident units, were back in balance.
Difficulties at the life unit, into which Abbey has been forced to pour
millions of pounds in recent years as a result of the slide in global stock
markets, were seen as a poison pill to any bid.
The life unit's problems, coupled with heavy losses at the wholesale banking
division following a disastrous decision to buy a large slug of bonds issued by
collapsed energy trading firm Enron Corp, plunged Abbey into a crisis from which
it is only now emerging.
In a separate statement Abbey said it made 350 mln stg pretax profit in the
first six months of the year, having racked up 1.6 bln of losses over the
previous two years.
Abbey's woes prompted the July 2001 sacking of former chief executive Ian
Harley, who was widely blamed by investors for encouraging UK anti-trust
regulators to block a 17 bln stg hostile bid from Lloyds TSB in 2001.
If the deal goes through Santander shareholders will own approximately 76.4
per cent of the enlarged company.
Abbey said chief operating officer Stephen Hester is to leave the company
but the rest of its management team agreed to stay on.
Arnold will remain at the company until the middle of next year to oversee
the transition.
Abbey is being advised by Morgan Stanley, while SCH's adviser is JP Morgan.
[e-mail]
rhb/ab

[jillyann] 26/7/2004 11:02

I was just querying CORPBULL's post.
Did anyone answer my question about the dividend?

[365] 26/7/2004 11:00

jillyann>

What make you say that?

Other banks, maybe a Dutch one could table a bid at anytime, not sure about Citi Bank

[jillyann] 26/7/2004 10:50

Have Citibank made an offer?

[the knowing] 26/7/2004 10:50

(Adds further detail from results statement)
LONDON (AFX) - Abbey National PLC, which today unveiled the terms of an
agreed 8.5 bln stg takeover by Spain's Banco Santander Central Hispano SA,
announced it swung into a statutory pretax profit of 350 mln stg in the first
half to June 30 from a loss of 144 mln a year earlier.
But the group's Personal Financial Services operations made a trading profit
before tax of 468 mln stg, down from 588 mln a year earlier but up on the second
half of last year.
Abbey said in a statement: "17 months ago the company was facing three areas
of serious risk that threatened Abbey's future - these have been addressed and
we are now able to focus all of our time and effort on growing the Personal
Financial Services business.
"We are still targeting the second half of 2004 as being the turning point
for PFS," said chief executive Lugman Arnold.
"We are undertaking a major turnaround of our core PFS business... We have
reversed years of under-investment in Abbey's people, products, service levels
and systems while improving efficiency allowing us to keep the cost base flat,
and removing pricing eyesores that did not fit with our brand positioning."
Arnold said these major changes have hurt Abbey's business performance in
the first half of the year, as previously indicated. But he added: "The period
of biggest disruption is behind us and we now have a competitive PFS platform."
The deterioration in PFS profits was outweighed by an improvement in
performance at the group's Portfolio Business Unit, which swung into a pretax
profit of 10 mln stg from a loss of 495 mln stg a year earlier with help from
asset sales.
The group's PFS operation suffered a fall in net interest income of 51 mln
stg, reflecting a narrowing in the overall margin to 1.58 pct from 1.75 pct in
the second half of last year, partly due to increase competition in the mortgage
market. "The spread decline is expected to moderate substantially in the second
half," Abbey said.
Gross mortgage lending was 13.0 bln stg in the first half, up slightly from
12.9 bln a year earlier but down from levels seen in the second half of last
year as the group lost market share in the remortgage market.
In retail banking, the group saw deposit outflows of 1.0 bln stg compared to
an inflow of 1.5 bln a year earlier. Abbey said a first quarter outflow of 1.2
bln stg was reversed in the second quarter with an inflow of 0.2 bln as a result
of product improvements, pricing changes and increased marketing.
Bank account openings totalled 191,000 in the first half, down from 206,000
a year earlier.
The group's normal interim dividend was unchanged at 8.33 pence a share.
[e-mail]
cw

[corpbull] 26/7/2004 10:45

Deals agreed means Directors laughing to their bank, jobs secured but SHAREHOLDERS SCREWED!!! REJECT THE DEAL, means Shareholders will get a better deal from CITIBANK, BOI ETC!!! AND DIRECTORS SACK!!!!

[jillyann] 26/7/2004 10:27

Am I correct in thinking that based on todays announcement re the takeover and the interims, that I am going to get 40p per share dividend this year?

[kaibutsu] 26/7/2004 10:22

broadwood, how do you arbitrage a suspended stock??

[me me] 26/7/2004 10:22

prallum
think it was around 10 Billion

[prallum] 26/7/2004 10:18

What did the Irish Offer for abbey last time when the board rejected the offer.

[broadwood] 26/7/2004 10:14

Seems a certain amount of the fall could be attributed to arbitraging of the two stocks by the hedge funds.Which would be temporary.

Other banks are falling - probably because of the increased competitive threat from Abbey and/or Abbey's confirmation in their results of squeezed margins - which we knew about anyway as they were the least competitive of the mortgage banks.