The Electronic Telegraph 25 April 1995 FRONT PAGE

Abbey National seeks £1bn takeover of N&P

By Charlotte Beugge, City Staff

Abbey said it wanted to buy National & Provincial for a "substantial premium", even though N&P had rejected previous advances. "We believe there would be substantial benefits to all parties," Abbey said. It was forced to make its intentions public as N&P's board had spurned its approaches.

A spokesman for Abbey, which changed itself from a building society to a bank six years ago, said that it had made its announcement so that N&P's members could discuss the approach at their annual meeting in Bradford tomorrow.

The spokesman said: "It is important that N&P members get a say that their board would otherwise not allow them. In the past, it has been the management at N&P, not the members, that has rejected us.

"N&P's board is just hiding behind the Building Societies Act. A takeover of N&P makes sound strategic sense for us as there is little duplication of branches and we would pay a substantial premium over asset value."

Under the existing Building Societies Act, a society's board does not need to tell its members about bid approaches it has received. But forthcoming changes mean that boards will have to tell members about such approaches at the next available meeting.

Abbey hinted that it would be willing to pay about 11/2 times N&P's net asset value of £732 million. If the bank paid £1 billion for N&P it could mean the society's 1.7 million members would get about £430 each. An N&P spokesman declined to comment.

An attempt by N&P, the ninth largest building society, to merge with the Leeds Permanent in 1993 failed because of a culture clash between the managements of the two societies. Under its former chief executive, David O'Brien, N&P staff had "roles" and staff meetings were known as "understanding events".

Mr O'Brien resigned last September after his management failed to produce results. He was replaced by the former finance director, Alistair Lyons.

Yesterday, John Wriglesworth, of Bradford & Bingley, N&P's nearest rival, said: "All the Abbey National wants to do is to asset strip N&P. It will be like the Vikings in England."

N&P branches will run normally today. New customers will be able to open accounts but may not benefit from any cash share-out.

2 Nov 94: Abbey National pays £56m for HMC

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