UK's Alliance & Leicester OKs takeover

LONDON: Shareholders in British mortgage lender Alliance & Leicester on Tuesday approved a 1.3 billion pound (US$2.35 billion) takeover offer from Spain's Banco Santander.

Alliance & Leicester said that holders of 84 per cent of its shares voted for the combination at an extraordinary general meeting.

Assuming all regulatory hurdles are cleared, the British company will become a wholly owned subsidiary of Banco Santander on Oct. 10, said Roy Brown, acting chairman of Alliance & Leicester PLC.

``The economic outlook and continuing uncertainty in financial markets have reinforced the Board's view that this transaction is in the best interests of shareholders, customers and other stakeholders,'' Brown said.

Banco Santander intends to merge Alliance & Leicester with its existing British subsidiary, the Abbey, to create a much larger bank with 959 branches and 10 per cent of Britain's current accounts.

Investors were being offered one Santander share for three A&L shares. The offer values each A&L share at 317 pence (US$5.90) each, as of August 8.

Including an impending interim dividend, worth 18 pence (US$0.34) per share, the deal represents a 53 per cent premium to A&L's stock market value just before the takeover was announced in July.

Santander, which expects job cuts among the combined bank's work force, has said that the deal would save it about 180 million pounds (US$335 million) a year in costs.