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Alliance & Leicester in bid talks Alliance & Leicester in bid talks
(20 minutes later)
British bank Alliance & Leicester has disclosed that it has received a takeover bid from an unnamed source. Shares in British bank Alliance & Leicester have soared by more than 40% after it disclosed that it has received a takeover bid from an unnamed source.
The firm said it was in discussions with a possible buyer about an offer of 317 pence per share, valuing the business at about £1.3bn. The firm said it was in "advanced" discussions with a possible buyer about an offer of 317 pence per share, valuing the business at about £1.3bn.
But it warned that it could not be sure that a deal would be "forthcoming".But it warned that it could not be sure that a deal would be "forthcoming".
Like other British lenders, Alliance & Leicester has been hurt by the credit crunch and has seen its share price slump in value. Like other British lenders, Alliance & Leicester has seen its share price slump due to the credit crunch.
'No certainty'
It is not yet clear who is bidding for Alliance & Leicester but industry reports linked leading European banks such as Lloyds TSB, Spain's Banco Santander and France's Credit Agricole with the approach.
Alliance said it had disclosed details of the bid "without the consent" of the suitor.
It added: "There can be no certainty that an offer will be forthcoming or as to its terms."
Unlike other leading UK banks and mortgage lenders, Alliance & Leicester has not had to tap its shareholders for additional cash to shore up its balance sheet.
Alliance saw its annual profits fall 30% last year amid turbulence in credit markets, which has forced it to write down the value of mortgage-backed investments by nearly £400m.
Like other lenders, Alliance has reacted to the credit turmoil by reducing the number of mortgages it sells and pushing up the interest rates.
Following the news of the bid approach, Alliance's shares rose 93p, or 42%, to 312.25p. Shares in other lenders soared on the news, with Bradford and Bingley shares rising by more than 25%.