A&L takes tough line against merger rumours
Tuesday 02 November 1999
As the search began for Mr White's replacement, the bank said it was pressing on with its pounds 300m share buyback programme in what was intended to be a clear signal that the bank is not in takeover talks with any other party. The shares closed 9.5p higher at 897.5p.
Analysts said A&L still has two years left of the protection against hostile takeovers following its flotation three years ago, although City speculation about potential deals is unlikely to abate.
Sources close to the bank insisted that Mr White's departure was over issues of management style rather than strategy. "They are emphatic that there was no deal, so it will be hard for them to turn round and do something in short order," one source said.
One banker added: "I don't think anyone will shed a tear. He ... has got his comeuppance."
Bankers were also dismissive of reports that the final bust-up was triggered by a bid approach from Lloyds TSB, the banking giant, which Mr White backed even though it would have led to the removal of many of the non-executives on the A&L board. However, banking sources said that Mr White had been considering alternatives following the collapse of merger talks with Bank of Ireland in May.
Among the options he is believed to have entertained were a deal with Lloyds or, more plausibly, with Bradford and Bingley, the building society which is planning to float next year. He was also keen on reviving talks with Woolwich, although John Stewart, the chief executive, had opposed a deal while Mr White was at the helm.
Lloyds TSB yesterday refused to comment on suggestions it had made an approach. But one source familiar with the bank's strategy said: "I can't believe that Lloyds would want to be saddled with all the baggage A&L is carrying - a declining share of the mortgage market, the issue of what to do with Post Office Counters and so on."
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