Spain-based Santander agrees to purchase of UK bank Alliance & Leicester

July 14, 2008 Alliance & Leicester (A&L), a major UK bank, has agreed to a deal regarding its sale to Banco Santander, a banking company based in Spain. The deal, which is worth £1.2 billion, means that shareholders will receive one share in Santander for every three shares they hold in A&L.

Santander said in a statement that "Santander and A&L announce that they have reached agreement on the terms of a recommended acquisition by Santander of A&L, which is to be effected by means of a scheme of arrangement under sections 895 to 899 of the Companies Act [2006]."

Sections 895 to 899 of the Companies Act 2006 focus on, among other things, the meeting of creditors and members and the duty of directors and trustees to provide information. Section 897 requires the company to "explain the effect of the compromise or arrangement" to the shareholders when an acquisition takes place. In the statement released under the Companies Act, it is stated the board of A&L considers the deal set by Santander to be 'fair and reasonable.'

Shares in Alliance & Leicester increased by 50% when information about the deal was first made public earlier today.

Unions have expressed concerns over the takeover by the company which also owns UK based Abbey. "Staff at A&L deserve to have answers about their future and we urge the company to be upfront about their intentions," said Andy Kerr, spokesperson for the Communication Workers Union.