Credit Agricole admits to assessing A&L bid |
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Published
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Mon, 22 May 2006 10:25
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LONDON - French bank Credit Agricole SA said that it is assessing a possible takeover of Alliance & Leicester PLC. The bank made its stand clear after weekend reports hinted that it was poised to tender an offer for the UK mortgage lender.
"The Group remains focused on its strong organic growth prospects and incremental acquisitions in Central and Eastern Europe and the Mediterranean basin," the group said in a statement. "At any one time the group may also review selected larger opportunities and in so doing will maintain its strictly disciplined evaluation approach. In this context, Credit Agricole is assessing Alliance & Leicester, amongst others, but would note that its evaluation is at a preliminary stage." The group added no offer had been made to Alliance & Leicester "and there can be no certainty that any proposal or offer will be made."
Credit Agricole had revealed last week that had €15 billion in resources to spend on acquisitions. This amount is at least three times than what was previously estimated. The Sunday Express had reported that Credit Agricole was planning a £6 billion bid for Alliance & Leicester. The UK lender has a network of 200 branches and remains an attractive takeover target. Spain's Banco Santander has also been linked to a possible bid.
Analysts are however quite reserved in their assessment of Alliance & Leicester’s takeover. "The synergies from putting Credit Agricole and Alliance & Leicester together are very, very modest," pointed out James Hamilton at WestLB. "If they launch a bid anywhere at or above the current share price they will be destroying shareholder value. The only bank that should realistically contemplate acquiring Alliance & Leicester is Santander."
Alliance & Leicester shares increased 84 to £11.99 in early trading today.
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Tracker mortgages are not clearly understood in Britain, says A & L 