Abbey set to back Spanish takeover

Abbey National shareholders are set to mark the end of an era when they give their backing to a takeover by Spain’s largest bank today.

Abbey National shareholders are set to mark the end of an era when they give their backing to a takeover by Spain’s largest bank today.

Investors are expected to allow Santander Central Hispano (SCH) to take control in a deal worth more than £8.5bn (€12.35bn) when they gather to vote.

Although around 800 people normally attend Abbey’s shareholder meetings, there will be space for 2,500 investors at north London’s Wembley conference centre, with overflow rooms for a further 1,100.

Abbey has around 1.7 million small shareholders who received windfall shares when it converted from a building society in 1989.

SCH received a boost in its bid to secure the bank last night when City watchdog the UK Financial Services Authority (FSA) said it saw no reason to block the deal.

Although no formal decision has been made, the FSA said it saw “no material impediments” to the proposed takeover.

A spokeswoman for Abbey described the statement as welcome news ahead of the vote.

A major development in SCH’s battle for the bank occurred last month when rival Halifax-to-Bank of Scotland group HBOS walked away from making an approach.

The takeover bid was given approval by the European Commission on the same day.

And earlier this week, the Spanish bank said it would allow Abbey investors with 2,000 or fewer shares and who live in the UK to use its free share dealing facility without needing to complete a Spanish tax form.

If the deal is given the go-ahead by Abbey shareholders today and Banco Santander investors next week, it is expected to be completed in November.

As part of the tie-up, Abbey investors will receive one SCH share for each Abbey share owned, but most are expected to cash these in.

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