ON THE UP: NatWest

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The Independent Online
SHARES in National Westminster soared 24 per cent on Friday after a surprise bid by its smaller Scottish rival, Bank of Scotland, which valued the UK bank at pounds 21bn. A takeover would create Britain's second- largest banking group.

Bank of Scotland has a market value about half that of NatWest, but says it will wring more profit from NatWest than the bank can under its own plan to buy insurer Legal & General. It is taking advantage of investors' concern that the bid for Legal & General is too expensive. NatWest rejected the offer as undervaluing the bank.

Many investors now expect that a rival bid could emerge for both NatWest and Legal & General as consolidation in the industry gathers pace.