Standard Life share sale cools Bank of Scotland bid hopes

Standard Life, the UK's largest mutual insurer, yesterday dashed hopes of a takeover battle for Bank of Scotland by announcing that it would dispose of "a substantial part" of its 32.2 per cent stake in the bank through a secondary offering.

The insurer said that Bank of Scotland would help with the marketing of its shares portfolio, worth an estimated pounds 900m.

Standard Life's decision on the Bank of Scotland shares follows a four- week review of all options in relation to its stake in the bank, which it described as a "a large proportion" of its UK equity portfolio.

Scott Bell, the insurer's group managing director, said: "We continue to have confidence in Bank of Scotland's future prospects and strategies, but following our review of the options available to us, we have now decided in the interests of our policyholders to rebalance our equity portfolio."

The decision helped to cool widespread speculation over Bank of Scotland's future as an independent force in UK banking. Shares in the bank dropped by 16.5p to 248p when the news emerged.

Potential bidders tipped for the one third stake in the bank included its rival, Royal Bank of Scotland, together with Abbey National, Lloyds and a number of foreign banks, especially from the US.

Standard Life's move, which is believed to have caught Bank of Scotland unawares, led to the resignation of Sir Bruce Pattullo, the bank's governor, from the insurer's board.

It is understood that Bank of Scotland was keen to see the shares disposed of through a secondary offering, thus allowing it to maintain its independence, rather than being sold in one single or several large parcels.

Sir Bruce said yesterday that the bank had performed strongly and had confidence about its future.

"Naturally we are sad that Standard Life has decided to reduce its stake, but recognise that the growth in the value of the investment has resulted in a need for it rebalance its portfolio," he said.

He added that he would comment on Bank of Scotland's current trading at the bank's annual general meeting later today.

In April, the bank reported a strong climb in pre-tax profits for last year from pounds 268.7m to pounds 449.7m - a result that was accompanied by a increase in the final dividend from 3.18p to 3.69p.

Although shares in Bank of Scotland fell after Standard Life announced how it would sell its stake, analysts said they were not too concerned by the drop.

A secondary offering undermined bid hopes in the stock, dealers said: "Admittedly it is not easy to find someone who can afford to buy the Bank of Scotland, given its size, and [that] a premium would be required," one said.

"But my sense is that this just kicks the shares back down to where they were before all the news hit." Before the announcement a month ago that Standard Life was looking to dispose of the stock, Bank of Scotland's share price stood at 242p. By the end of that week it had leapt to around 270p and reached a high of 286.5p on 21 May.

Start your day with The Independent, sign up for daily news emails
News
Ben Little, right, is a Labour supporter while Jonathan Rogers supports the Green Party
general election 2015
News
The 91st Hakone Ekiden Qualifier at Showa Kinen Park, Tokyo, 2014
news
Life and Style
Former helicopter pilot Major Tim Peake will become the first UK astronaut in space for over 20 years
food + drinkNothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
News
Kim Wilde began gardening in the 1990s when she moved to the countryside
peopleThe singer is leading an appeal for the charity Thrive, which uses the therapy of horticulture
Sport
Alexis Sanchez celebrates scoring a second for Arsenal against Reading
football
Life and Style
health
Voices
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
News
i100
News
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
news
Life and Style
Buyers of secondhand cars are searching out shades last seen in cop show ‘The Sweeney’
motoringFlares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own