Abbey bid 'inadequate' £650m for N&P in 1993

ALASTAIR Lyons, chief executive of the National & Provincial Building Society, has accused Abbey National of trying to take over the N&P "on the cheap", revealing it offered only £650m for the society in 1993.

At the time, the N&P rejected the offer - equivalent to the society's net assets - after being advised by its merchant bank that its true value was "very significantly higher", Mr Lyons told the Independent on Sunday.

Mr Lyons, who has been chief executive for six months and was finance director during Abbey's last approach, described the offer as "woefully inadequate".

Abbey is once again wooing the N&P, announcing last week that it was prepared to pay a substantial premium to net assets, which now stand at £732m. Mr Lyons has agreed to meet Abbey's chief executive, Peter Birch, tomorrow.

He said he was "surprised" by the Abbey's decision to announce its interest. "When you already have a meeting set up, you don't need to broadcast it all over the City of London."

The low level of the 1993 offer suggests that hopes that Abbey might offer as much as £1.5bn - twice net assets - look over-optimistic. About 1.7 million N&P saving and borrowing members would stand to receive cash or free shares if Abbey made a bid. On Friday, N&P suspended the opening of new share accounts to stymie opportunists. It reported huge inflows from speculators hoping to benefit from any payout.

The N&P, which is now advised by Lazard and Slaughter & May, said it would do whatever was in the best interests of its members. It is also in discussions with other unnamed potential bidders.

Mr Lyons said that the highest offer would not necessarily have the board's backing.