A major shareholder in British bank Abbey National has said Bank of Ireland's current proposal is unimpressive.
David Lis of Morley Fund Management, which owns just over 2% of Abbey, told Reuters: 'We wouldn't be happy as things stand, but it's very early days.'
Bank of Ireland yesterday confirmed that it had made a preliminary approach to Abbey in a move that could lead to a merger or takeover. A statement went on to say that no formal discussions have yet taken place.
Shares in Abbey closed 6% higher in London this evening but shares in Bank of Ireland dropped over 8% to close at €9.37 in Dublin.
Abbey National is the UK's sixth largest bank and is going through a difficult period at the moment. Following revelations in June that its profits would be dented by losses of £272m on stock market investments, its chief executive resigned. Its share price has halved in the past year.
Bank of Ireland says a combination of the two businesses would benefit both sets of shareholders. If the deal went ahead it would create a single bank worth €25.5 billion, catapulting Bank of Ireland into the top 20 companies on the London Stock Exchange, where it intends to have its main listing.
Bank of Ireland derives 25% of its profits from its UK operations where it has a network of 190 branches.
