BoI to offer €1.6bn in cash along with shares for Abbey National

BANK of Ireland will offer Abbey National shareholders a cash pay-out of some €1.6 billion in a bid to sweeten its merger proposal, it was reported yesterday.

Chief executive Michael Soden is expected to unveil the cash offer with an all-share merger proposal that will value Abbey’s shares at 750p. Abbey is currently valued at around 14.3 billion euro. Some three million private investors may be swayed by the deal. Around 30% of Abbey National is controlled by small shareholders, many of whom received their shares following the de-mutualisation of 1989.

Despite the initial rejection of Bank of Ireland’s overtures, Abbey National will now face pressure to at least sit down to talks.