Resignation puts Alliance in play

Bank's stand-in chief executive signals willingness to strike a deal with a British competitor
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The Independent Online

By Jason Nisse and Dan Gledhill

By Jason Nisse and Dan Gledhill

31 October 1999

ALLIANCE & Leicester, the former building society, has effectively put itself up for sale after its chief executive, Peter White, resigned late on Friday following a boardroom row.

It is understood that Mr White, who is expected to receive a pay off of about £1.5m, was against looking for a deal with another UK bank. He had led merger talks earlier this year with Bank of Ireland, a deal that would have left him in charge of the British operations, but the negotiations fell apart. Sources on the Irish side complained of arrogance within the A&L management.

John Windeler, the A&L chairman who will assume the post of chief executive until a replacement is found, denied that Mr White's departure had anything to do with the collapse of the Bank of Ireland deal.

However, Mr Windeler, an experienced US banker who only became chairman earlier this year, confirmed that the group would be looking for a merger with a UK financial institution. "We have a UK focus," he said. "We do not have overseas ambitions."

There was speculation yesterday that Mr White's departure had been prompted by an approach by a rival bank to A&L. Particularly strong rumours of negotiations with the Woolwich were circulating last week. The two groups have already held abortive merger talks and A&L shares have risen 10 per cent in the last fortnight.

But Richard Pym, the A&L's finance director, said that the company had been buying back shares and would not have been allowed to do so if there were takeover talks going on.

Banking analysts have pointed to the good geographical fit between A&L and the Woolwich. The latter has also gained a reputation for innovation through the launch of its Open Plan concept, which is seen as a strong competitor to Prudential Corporation's internet banking business, Egg.

Abbey National, another mooted partner, is also thought to have set its sights elsewhere. There has also been talk of a deal with Lloyds TSB, although it is understood that chairman Sir Brian Pitman considers A&L too small to justify the time and expense necessary to execute a deal.

Mr Windeler was dismissive about Mr White's management style, saying that the group needed a "more consensual style of leadership", which would give more responsibility to divisional heads. Senior bankers recruited to head up A&L's divisions in the last couple of years are believed to be frustrated with the way the bank is run.