Alliance & Leicester shareholders meet over Spanish takeover

Shareholders in Alliance & Leicester will gather today to cast their final votes on the mortgage lender’s proposed £1.3bn (€1.6bn) takeover by Spanish banking giant Santander.

An extraordinary general meeting called by A&L, which saw its share price fall by more than 6% yesterday amid the market turmoil sparked by the collapse of Lehman Brothers, will begin at Birmingham’s International Convention Centre this morning.

A&L’s board agreed the sale to Santander in July, saying the bid offered the group vital “certainty” amid the turbulence of the credit crisis.

News of the deal came just two weeks before A&L announced that the credit crunch had almost completely wiped out profits in the first six months of the year – at £2m (€2.5m), down from £290m (€365m) a year ago.

The takeover was also announced amid mounting concerns over bank funding and as A&L’s rivals such as Bradford & Bingley and Halifax Bank of Scotland struggled to secure shareholder backing for their multi-billion pound rights issues.

A&L has warned of “significant external risks” if shareholders reject the deal, which would see its business merge with Santander’s existing UK subsidiary, Abbey.