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Abbey rejects Lloyds again
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December 12, 2000: 1:24 p.m. ET
Mortgage lender calls latest $26.3 billion offer from Lloyds inadequate
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LONDON (CNNfn) - Britain's Abbey National PLC rejected Tuesday an increased offer from bank Lloyds TSB PLC, saying the 18.2 billion pound ($26.3 billion) offer as inadequate.
Britain's second-biggest mortgage lender, Abbey National, said it received a second letter from Sir Brian Pitman, chairman of Lloyds TSB, which said Abbey National shareholders would get 1.5 Lloyds TSB shares and 260 pence in cash for every Abbey share they held.
"The board of Abbey National has met today to consider the Lloyds TSB proposal and unanimously agreed to reject its as inadequate and uncertain," the mortgage lender said in a statement.
 Last week, Abbey (ANL) said it found Lloyds's initial proposal "unattractive," adding that it did not intend to enter talks with Lloyds, raising the prospect of a hostile offer. Abbey is still in talks with the Bank of Scotland about a possible merger.
The Financial Times said earlier Tuesday that Abbey was concerned about objections that competition regulators might raise against a tie-up with Lloyds, the most profitable bank in Britain and its fourth-largest by assets. Such a combination would form a bank with more than 27 percent of current accounts and 22 percent of mortgages in Britain, the paper said.
A Lloyds spokeswoman declined to comment, while a spokeswoman for Abbey National said "there is nothing new," and would not comment further.
Abbey National closed up 3.1 percent at 1,165 pence on Tuesday. Bank of Scotland (BSCT) rose 1.1 percent to 698, while Lloyds TSB rose 1.9 percent (LLOY) to close at 688.
In October, Bank of Scotland and Abbey National restarted talks dating back to the summer.
"If Lloyds were to come out with a vast, knockout blow for Abbey, then we would take a hard look – and most likely walk away," said a spokesman for Bank of Scotland. "The ball is very much with Lloyds, and of course that depends on what Abbey does." 
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