HBOS in hush-hush Abbey meeting

BANKING group HBOS chief James Crosby held a secret summit with Abbey National supremo Luqman Arnold earlier this year to discuss a takeover, the Daily Mail has revealed.

News of the meeting came as it emerged that Deutsche Bank has begun sounding out City shareholders in Lloyds TSB to see if they would support a counterbid for Abbey.

Crosby made his overtures after Spain's Banco Santander first approached Abbey in March.

Abbey has now recommended an £8.3bn bid from Santander, but HBOS is threatening to gatecrash.

HBOS last night refused to comment on the meeting, but the encounter underlines the seriousness of its interest.

It is understood that Crosby met Arnold primarily to discuss industry issues and in the course of the talks he tentatively raised the question of a takeover deal.

Lloyds is lining up Deutsche to monitor Abbey, but has yet to make a formal appointment.

This indicates that Lloyds TSB boss Eric Daniels may be getting ready to follow HBOS with a £9bn bid.

Lloyds declined to comment. It was blocked by regulators when it tried to land Abbey four years ago.

Santander is accelerating its takeover plan. Spanish executive Juan Inciarte slammed HBOS for 'playing with smoke and mirrors' after it complained to Brussels about Santander's close ties with Royal Bank of Scotland.

Although Abbey is still committed to the Santander deal, its advisers are analysing market shares and competition issues to work out the probability of a bid from HBOS being blocked.

Bankers believe HBOS is already sounding out the Office of Fair Trading over whether a deal would be referred. Analysts suggested that it could hive off Birmingham Midshires if regulators said HBOS-Abbey's combined 34% share of the mortgage market was too much.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in