Spain's Santander to buy Alliance Leicester for 1.26 billion pounds

MADRID (AFP) — Spain's biggest bank, Santander, said Monday it had reached agreement to buy British lender Alliance and Leicester in an all-share deal worth 1.26 billion pounds (1.57 billion euros, 2.51 billion dollars) as it continues its push into the British market.

Under the terms of the deal, Santander, which acquired British bank Abbey National in 2004 for 9.2 billion pounds, will offer one of its shares for every three shares in Alliance and Leicester, the Spanish bank said in a regulatory filing.

David Cumming, British equities chief at Standard Life Investments, which holds a 2.35 percent stake in Alliance and Leicester, said it was a "gorgeous deal" for Santander, Europe's second biggest bank by market capitalization after Britain's HSBC.

"They are acquiring A and L on give-away terms," he said. "I would be amazed if no one else counters ...