Alliance & Leicester Share Discussion Threads

[loganair] 14/7/2008 13:09

Alliance & Leicester agrees to £1.3 billion bid from Santander.

Alliance & Leicester is to be rolled into the Abbey banking business owned by Banco Santander after it agreed to a £1.259 billion bid from the Spanish bank.

[powwow] 14/7/2008 13:09

Santander's A&L firesale

Maybe not such the positive, forward-looking, banking deal the beleagured UK market has bought in to.

All the expected detail is there in the Santander statement: A&L shares valued at 299p each; one Santander share for every three; a premium of 36.5 per cent; significant synergies for Santander:

The Acquisition allows the combination of A&L and Abbey's complementary business operations, enhancing the competitive positioning of the products and services offered by the group, benefiting customers. The combined group should also benefit from increased efficiency and should, over time, enable A&L's cost of funding to be reduced from the current high levels.

For Santander, the acquisition will deliver increased critical mass in the UK market.

But here's the sting:

To address potential liquidity risks, Santander intends to reduce the assets of the combined A&L and Abbey by between £20 billion and £30 billion over the course of two years. This will include running down the treasury portfolio over time. In estimating the financial benefits of the Acquisition, Santander has taken into account an estimated impact on profitability of such deleveraging.

Although over a longer time frame, selling so many assets - into a contained and falling UK market - will not be pleasant. Santander has clearly prioritised the need for quick sales over concerns about booking losses too - so no waiting around for the "right price" for that SIV paper or CDO bond.

Update: Sting 2

Against this background and in current market conditions, Santander believes that it is consistent with its existing policies to assume that it will need to provide additional capital of £1 billion to A&L.

[jennyj] 14/7/2008 13:06

This banks been robbed, its worth 3 times this.

Serious Fraud! Write to everyone, another british business STOLEN

[tricky1992000] 14/7/2008 12:22

bnc share price just shot up - THEY KNOW THEY HAVE A STEAL HERE.

[hectorp] 14/7/2008 12:17

lol well done holders, nice 30% today.

PS If I were the UK Government I'd be looking at Bank Santander, I would start to consider it was getting too much hold of the UK Banking system.

[dope007] 14/7/2008 12:17

Because you must be a bit daft John and they are trying to protect you?

[todworth] 14/7/2008 12:16

we have only the city to blame for another takeover by a foreign bank.
AND FOR PEANUTS.

[alexx] 14/7/2008 12:15

john
It's probably because the stock is no longer borrowable. Could ring them. Cantor sometimes accept shorts when no one else will.

[johncraven] 14/7/2008 12:11

I am trying to short al. and its coming up with no open shorts allowed in market does anyone know why this is?

[mirshahik] 14/7/2008 12:08

A&L is rescued by Satandar.

[tricky1992000] 14/7/2008 12:07

James Henderson: £1.3 billion bid undervalues Alliance & Leicester

By Nicholas Paler | 11:47:30 | 14 July 2008

Henderson Global Investors' fund manager, James Henderson, has labelled the £1.3 billion bid for mortgage lender Alliance & Leicester (A&L) as undervalued given the sensible way in which the business has been managed.

The company this morning said it was in talks over a potential offer for the bank worth a total of 317p per share, with Spanish bank Santander said to be interested party.

But Henderson, who runs the Henderson UK Equity Income A Inc fund, said at that price the Spanish company, which owns Abbey in the UK, would be getting Alliance & Leicester PLC (AL.) (A&L) too cheaply.

He told Citywire: 'It would be a very good deal for the acquirer as they are only giving tangible book value. It doesn't take into account A&L's market position, the company's name, or future earnings considerations, and is undervalued.'

Henderson, who held an overweight position in A&L of 1.2% relative to the FTSE All Share (as at end of May), added the bid price overlooked the fact that A&L was conservatively managed and had a better loan-to-value ratio than its rivals.

At 11.40am shares in A&L were up 48%, or 104.75p, to 324p.

Broker Charles Stanley upgraded its stance on the bank to hold from reduce following the bid, noting that the bid had provided respite for UK bank shares.

Talk of a takeover also boosted shares in beleaguered bank Bradford & Bingley PLC (BB.), which climbed 13% or 6.25p, to 53.75p, just over a penny below its rights issue price.

[alexx] 14/7/2008 12:06

tricky
yes, not a banking expert but spanish property is hardly something to be involved in,

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1/3 of a share at 11.23 euros ( euro/pound at 1.2517 ) doesn't sound like £2.99. Where am I wrong?

[mirshahik] 14/7/2008 12:05

Rescue deal fro A&L

[kiwi2007] 14/7/2008 12:05

"""Santander believes that it is consistent with its existing policies to assume that it will need to provide additional capital of £1 billion to A&L. This additional capital will be allocated to balance sheet strengthening and integration costs:""


Rescue deal apparently and probably arranged by the BoE

£1 Billion being pumped in... without it A&L were toast?

[little beaker] 14/7/2008 11:57

Yes, but judging by the volte-face that a couple of other financial institutions had to do, the market considered otherwise.

I don't have a clue how their tier-1 capital ratio or other looked, so I'm only speculating.

[daveram13] 14/7/2008 11:55

My understanding is that they had the funding, but were having difficulty beyond the 2009 date. B of E / Government reluctant to offer support.

[little beaker] 14/7/2008 11:53

Yes, the implication of the bid is that their "funded until late 2009" claim might be rather questionable

[sandybubbles] 14/7/2008 11:52

it's a barefaced steal but are the directors recommending the bid to cover some nastys not yet dislcosed. 299p is a laughable price but I am not laughing
but hoping for a more realistic bid from some other bank

[dope007] 14/7/2008 11:51

Shorted to oblivion and then sold abroad on the cheap. UK fund managers must be proud of themselves yet again!!!

[little beaker] 14/7/2008 11:51

This will be a bad deal for staff: think of all the "synergies" they will find across their UK banking operations.

But no doubt the directors will get nice big golden parachutes. Doncha love capitalism?

[daveram13] 14/7/2008 11:48

Need to vote no to this deal despite current market. We have taken the risk (and the losses on share price to date) and now they will take all the profits abroad. A legalised steal!

[tricky1992000] 14/7/2008 11:46

santander are caught up in the spanish property bubble

and the boom in south america won't last forever.

[psps] 14/7/2008 11:46

Satnader must be laughing at the price they are paying.............real bargain for them.

Sue and sack the Directors of AL. for refusung to accept £12.00 last year

[mountpleasant] 14/7/2008 11:42

1 Santander share for every 3 AL. held and its an agreed deal.