Abbey National shares soar on takeover report

SHARES in troubled British banking group Abbey National soared 16% yesterday after it confirmed it had received a takeover approach. The company has previously been the target of Bank of Ireland.

Abbey stock jumped to more than 570p, valuing the company at just over £8 billion, after it said an unnamed party had made an approach.

An Abbey spokeswoman refused to give details, saying only that it would make an announcement “in due course as appropriate”.

City speculation about the potential bidder immediately focused on Spain’s biggest bank, Banco Santander Central Hispano (BSCH). A newspaper report in May claimed that BSCH was interested in a takeover of Abbey.

Abbey’s share price has fluctuated widely in recent months as rumours about approaches for the bank circulated among City investors.

The group has shed jobs, sold non-core assets and reorganised its operations in a three year overhaul designed to reverse two years of heavy losses. It has insisted it would show a return to the black in the current financial year after losses hit £686m in 2003 and £947m in the year before that.

Its main offices are in London, Milton Keynes, Bradford, Glasgow and Edinburgh. It employed about 25,900 people at the end of last year and it has 1.8 million shareholders.