Abbey National tight-lipped over buy-out claim

Banking group Abbey National today remained tight-lipped over a report claiming it had received a “serious” takeover offer from a Spanish bank.

The group’s board is said to be debating whether to enter into talks with Spain’s biggest bank, Banco Santander Central Hispano (BSCH), according to The Sunday Times.

Abbey’s share price climbed to the top of the FTSE 100 Index of leading shares last week following a report that the Spanish giant had expressed interest.

The article stated that BSCH did not make an offer and that discussions were not though to have progressed beyond the initial stage.

However today’s report claimed the bank’s approach six weeks ago was a “serious offer of intent”.

Chief executive Luqman Arnold and chief operating officer Stephen Hester were said to be discussing two strategies – whether to encourage offers now or wait to see the benefits of their restructuring plan, according to the newspaper.

Abbey, which is battling to reverse two years of heavy losses, has sold its non-core assets and reorganised its operations as part of the three-year overhaul.

Last month it told the City that the outlook for trading profits at its high street division was “moderately weaker” – but insisted the restructuring remained on track.

The group endured a rough ride from investors at its annual meeting amid renewed concerns over the troubled group’s recovery.

Investors criticised the company’s recent brand overhaul, which has seen the trading name shortened from Abbey National to just Abbey and a new logo introduced.

It had earlier told shareholders that further pressure on margins had left first quarter profits in personal finances slightly lower than the second half of 2003.

However, Abbey said it would still show a return to the black in the current financial year – after losses hit £686m (€1.01bn) in 2003 and £947m (€1.4bn) in the year before that.

A spokesperson for Abbey would not comment on today’s report.