Spanish bank 'won't be put off by rival Abbey bid'

The Spanish bank bidding to buy Abbey National insisted today that a rival offer from UK group HBOS would not necessarily derail its interest.

The Spanish bank bidding to buy Abbey National insisted today that a rival offer from UK group HBOS would not necessarily derail its interest.

Santander Central Hispano (SCH) said a competition inquiry likely to stem from a bid by HBOS did not “provide grounds” on its own for the offer to lapse.

The statement, which pointed out that it had until March 31 to complete its acquisition, came as the Financial Times said Edinburgh-based HBOS had been granted access to financial information about Abbey National.

Under takeover rules, potential bidders are allowed access to the “data room” containing key information. There was no comment from Abbey National today.

HBOS has already said it is considering its position on Abbey, with a final decision on whether to bid likely to be made within the next month.

A move by the Halifax and Bank of Scotland owner is likely to increase uncertainty for Abbey staff as the two groups have branches close to each other.

Yesterday, SCH said it would limit job losses among Abbey’s 26,000-strong workforce to around 3,000, mainly because it did not intend to close branches.

It is likely to make savings of €450m (£304.8m) in the next three years through changes to IT and back-office operations.

SCH also said it would award Abbey employees 100 Santander shares - currently trading at around eight euros each - as part of the terms of its £8.3bn (€12.3bn) acquisition, which was first announced last month.

European regulators are expected to complete their investigation into the SCH takeover on September 17 and the Spanish bank hopes the deal could be finalised by the end of the year.

However, a counter-bid by HBOS could lead to a repeat of the inquiry that blocked the £18bn (€26.75bn) attempted takeover of Abbey by Lloyds TSB in 2001.

According to weekend reports, SCH is concerned about the potential damage to Abbey’s business by a probe that could last longer than 24 weeks.

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