Alliance & Leicester shares up 50% over takeover talks

We announced this morning that Alliance & Leicester are in takeover talks, it is thought that Santander is the potential buyers. Well it seems that this news has helped A&L’s shares, as they have increased by almost 50%.

Alliance & Leicester is now thought to be very close to signing a deal with who the BBC think is Santander who own Abbey, in a deal that is worth £1.3bn. So far the Spanish bank has declined to comment.

If the £1.3bn deal is correct, then this would value the shares at 317p, that 299p plus an 18p interim dividend. Shares last night had closed at 219.5p, after today’s news they leapt to as much as 325p per share.

According to the guardian.co.uk, this increase in share prices has come as a big surprise, just last week A&L were thought to be announcing further write-downs, but with the prospect of a buyout things have taken a surprising turn.

The news of Santander and a possible takeover of Alliance & Leicester, means that the Spanish bank has no lost interest in UK Banks. Analysts in the city are warning that this takeover is not certain, and that the suffering in UK banks has not yet come to an end.