Rumours are circulating today that National Australia Bank has appointed investment bank Goldman Sac...
Rumours are circulating today that National Australia Bank has appointed investment bank Goldman Sachs to lead a bid for Abbey National Group following the UK company's share price slump since last month's massive profits warning.
NAB is believed to be preparing a duel listing that would enable both companies to retain domestic tax advantages, much like last year's merger between Australian miner BHP and its UK equivalent Billiton.
NAB already operates in 15 countries, including the UK, where it owns the Clydesdale, Yorkshire, and Northern banks.
But it needs to get more scale to its UK operations if its is to turn its presence here into a really profitable one.
Buying Abbey would increase the number of NAB customers fourfold to some 20 million in the UK and Irish markets and take it into the lucrative southern and southeastern UK banking markets from its current base in northern England and Scotland.
Abbey shares fell by nearly a quarter between early June and last week, although shares have started soaring this afternoon, up 12p to 807p by 3.10PM, giving it a market value of £11.6bn.
A deal would also bring the Scottish Mutual and Scottish Provident names under the NAB umbrella in time for proposed changes to the way financial products are sold to consumers following the Sandler, Pickering and Inland Revenue reviews.
Abbey has already stated following yesterday's publication of the Sandler Review that it sees banks as becoming the key distribution point for the simplified products proposed by Sandler to be sold without advice.
A combined NAB-Abbey group would have a market value in excess of £30bn, creating a significant new force in favour of direct sales in the UK market.
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