Abbey and BoS mull further merger talks

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The Independent Online

Bank of Scotland was last night holding out against a request from Abbey National for a meeting between the chief executives of the two banks to discuss Abbey's plans for an agreed takeover of the Scottish bank.

Bank of Scotland was last night holding out against a request from Abbey National for a meeting between the chief executives of the two banks to discuss Abbey's plans for an agreed takeover of the Scottish bank.

Earlier, Lord Tugendhat, Abbey's chairman, met BoS's governor, Sir Jack Shaw,on neutral ground in London but failed to break the deadlock. The meeting was intended to end the phoney war, prompted by the disclosure 10 days ago that the banks have been in on-off merger talks for several months.

Abbey will today confirm it has bolstered its advisory team with the appointment of Morgan Stanley, Bank of Scotland's adviser in its bid for National Westminster Bank. The position of Ian Harley, the Abbey chief executive, is still seen as the chief obstacle, with Abbey refusing to bow to City pressure for him to step aside in favour of his BoS counterpart, Peter Burt, and his management team.

Following yesterday's meeting the banks issued a joint statement. This read: "There was an exchange of views during which both sides explored the prospect for further discussion. Further exchanges will now be considered by both parties."

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