Wednesday, Jul 16, 2008
Santander A&L deal turning sour?
Herald: Alliance & Leicester loses allure as UK banking fears weigh
Shares in Alliance & Leicester sank by 3% yesterday, the day after it received a £1.3bn all-share takeover offer from Abbey's Spanish owner Santander, as investors digested the chances of a rival suitor making a move for the former building society. This seems increasingly unlikely, as the perceived lack of growth in the UK market would mean only a bank with an established UK presence is likely to consider a bid to reap economies of scale.
Posted by paul @ 12:11 AM (548 views) Add Comment
8 Comments
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1. little professor said...
I'm hearing rumours of Lloyds TSB stepping in to the fray.
2. str 2007 said...
I'm still not understanding why someone would want to buy Alliance and Leicester.
They've got a relatively dubious mortgage book as far as I'm aware.
Unless they've sold off the worst of it, why would you pay to take on a liability in a shrinking market.
Imagine how much advertising and customer good will you could generate for £1.3 billion.
You could run an advert offering the 1st 13 million savers £100 golden hello. And save the cost of making a load of people redundant.
(Simple example but there has to be a better way of aquiring customers/market share for £1.3billion)
3. str 2007 said...
Further
Is there a bit of boardroom machismo going on here.
I suppose it sounds better to say you oversaw a take over bid, than, spent a lot of money on advertising.
I think the problem with a lot of boardrooms is that the people in them have never run their own small business and seem too happy and eager to work their way through money that isn't theirs.
4. str 2007 said...
And another thing
As we've been saying on here, there are no 'bargains' yet.
Hatches and battens is the way forward for at least 18 months.
If you've used all your ammo in the 1st battle you'll end up loosing the war.
5. str 2007 said...
Does anyone reading here preside over a boardroom of people who just want to spend the companies cash.
I am available for a balanced view at a modest fee.
6. str 2007 said...
I'll shut up now - rant over.
7. beartil2010 said...
I agree with all five of your comments!
Also, believe me, there are a lot of people in boards in small companies who like to spend other people's money and don't know how to run a business - not that credit is becoming scarce that will stop too!
8. nooneo said...
Maybe Abbey/santander want to hide some of their own disastrous forays into the mortgage market, in the balance sheets of the new aquisition, you know. "Oh, we didn't realise that A & L's books were soooo bad" - All they have to do is hide a large amount of their own debt within the bounds of this dodgy bank. Maybey Abbey has been analysing it's own sub prime (self certification) market and needs a scapegoat for it's shareholders.