Shares in British mortgage bank Alliance & Leicester jumped over 15% today after reports it held tentative takeover talks with Spain's Santander early last month.
Several newspapers reported this week that the two banks held talks last month but negotiations faltered after they failed to agree a price. The Financial Times, however, quoted people close to the bank as saying Santander had not ruled out resuming talks or making an improved offer.
In an interview with the FT on Monday, Santander Chairman Emilio Botin said Santander wanted to grow in the UK and the US and was looking for buying opportunities during the current market turmoil.
With sentiment battered by the credit crunch and the near collapse of Northern Rock, another mortgage bank, A&L shares lost more than 40% of their value in 2007.
Santander is considered relatively strong amid the credit market fallout. It was one of three banks that split Dutch peer ABN AMRO in the biggest-ever banking takeover, but since the deal Santander has already netted €2.4 billion from the sale of Antonveneta, part of its share of the Dutch spoils.
A&L, Britain's seventh-largest bank, has long been named as a takeover target. Often-named predators include Santander, as well as France's Credit Agricole and Australia's NAB. Credit Agricole said in 2006 it was considering making an offer but later picked a Greek deal instead.
Santander, which already owns retail bank Abbey in the UK, and A&L have declined to comment on the reports.
