Santander moves to persuade Abbey investors

Santander Central Hispano, Spain's largest bank which has made a bid for Abbey National, yesterday embarked on an intensive roadshow to try to persuade shareholders to back the offer, which values Abbey at more than £8bn.

Santander Central Hispano, Spain's largest bank which has made a bid for Abbey National, yesterday embarked on an intensive roadshow to try to persuade shareholders to back the offer, which values Abbey at more than £8bn.

The bank began its charm offensive in Madrid, after Spanish institutional investors took fright at its move to pull off Europe's largest ever cross-border banking merger, sending its shares down 8 per cent over two days.

Abbey National and Santander will also jointly see all of the British bank's shareholders over the course of the next week, which include Fidelity, Legal & General and the US fund manager Brandes.

Shareholders had mixed views. Morley, the fund management arm of the insurer Aviva, said that following a presentation from Santander, it was confident the bank could achieve its aimed synergies of €560m (£370m) a year by 2007. Morley said it was "minded" to support the deal, as long as the outlook was not fundamentally altered by a counter bid.

Another shareholder said the price being offered by Santander did not reflect the value of Abbey's powerful franchise in retail banking. The shareholder said Abbey could receive a counter bid from a UK rival because the competitive environment had changed since Lloyds TSB was blocked from buying Abbey in 2001 by the Competition Commission.

While Abbey's shares rose 10p yesterday to 567p, a number of institutions cut their stakes.