Britian bank facing takeover bid

MADRID, Spain — Spain's largest bank, Santander Central Hispano SA, made a takeover bid Sunday for Abbey National, Britain's six-largest bank and second-largest mortgage lender, according to news reports.

Santander gave no details of the offer issued at the end of a board meeting Sunday, saying it would first have to give information to Spanish market regulators, according to state news agency Efe.

Abbey National board members were studying Santander's bid in London.

If successful, the takeover would create the world's eighth-largest bank by market value and fourth-largest in the 12-country euro zone.

An announcement was expected today, pending an expected agreement Sunday, Efe reported, citing unnamed sources close to the bank. A Santander spokesman declined to comment.

The Wall Street Journal, citing sources close to the Spanish bank, reported that the takeover offer was as high as $16.5 billion.

Earlier this year, Santander Central Hispano made what British media described as an "informal approach" to Abbey National. No pricing details were given at the time.

With a market capitalization of 7.2 billion British pounds ($13.2 billion), Abbey is the U.K.'s sixth-largest bank. Its shares closed 15.6 percent higher Friday at 570 pence ($10.49) on the London Stock Exchange.

Abbey's share price has fluctuated widely in recent months amid takeover rumors.

The group has cut jobs, sold noncore assets and reorganized its operations in a three-year overhaul designed to reverse two years of heavy losses.

It has insisted it would return to the black in the current financial year after losses hit 686 million pounds ($1.2 billion) in 2003 and 947 million pounds ($1.7 billion) the year before.

Three years ago, domestic rival Lloyds TSB made a bid for Abbey, but was blocked by regulators because the combined bank's dominance would have violated competition rules. Since then, Royal Bank of Scotland executives have said they would like to buy Abbey but didn't believe regulators would permit the takeover.

Santander has retail banking operations in Spain as well as in other European countries and in Latin America, where its subsidiaries make it the top banking group. The subsidiaries include Banco Santander-Chile, Banco Rio de la Plata in Argentina and Grupo Financiero Santander Mexicano. The bank has more than 100,000 employees worldwide.