Irish Life & Permanent has denied a report stating that it has held talks with Halifax Bank of Scotland (HBOS) regarding a possible takeover by the UK bank.
In a statement yesterday, Irish Life & Permanent said that while its policy was not to comment on speculative stories, a report stating the two sides had held talks recently was "untrue".
"Neither the company, nor anyone acting on its behalf has been involved in any such discussions or talks with representatives of HBOS or anyone acting on its behalf". A spokesman for HBOS could not be contacted yesterday.
There has been speculation that HBOS, which operates Bank of Scotland Ireland in the Republic, has been seeking an acquisition in Ireland. Irish Life & Permanent, headed by chief executive Mr David Went, has the largest life and mortgage businesses in the State and would offer HBOS access to the Irish clearing system.
Irish Life & Permanent shares have rallied strongly in the past month on foot of market speculation about a possible takeover. Last December the shares were trading at €11.85. Last Friday they closed almost €2 higher at €13.70, valuing the financial institution at €3.7 billion. The Sunday Independent reported that HBOS would pay €17 a share putting a price of €5 billion on the company.
Bank of Scotland Ireland specialises in dealing with the small business sector and has been expanded to include the former State-owned bank, ICC. The bank also built a strong brand in the Irish mortgage market when it began to sell mortgages in Ireland in 1999 from its Edinburgh head quarters. The bank undercut the rate of interest charged by the main Irish banks and has been acknowledged as sparking a competitive price war here to the benefit of Irish consumers.
Mr Len Riddell, an analyst at Goodbody Stockbrokers, expressed surprise at the speculation linking HBOS and Irish Life & Permanent and said the UK bank would not be well capitalised enough to do this deal. "It would make more sense for HBOS to look at Irish Life & Permanent rather than AIB or Bank of Ireland." Mr Riddell said Irish Life & Permanent's banking business, Permanent TSB, would give HBOS access to the Irish clearing system and would instantly make it the biggest mortgage lender in the Republic. It could look to sell the life business, he suggested.
HBOS's main rival, Royal Bank of Scotland, has taken over First Active, merging it with its Ulster Bank operations in the Republic.
HBOS was formed through the merger of Bank of Scotland and Halifax in 2001. The bank has 22 million customers and claims to have a relationship with two out of five households in the UK.
It has assets of more than £380 billion, and is the UK's largest mortgage and savings provider as well as being a major player in the provision of new current accounts and credit cards in the UK.
With around three million private shareholders, HBOS has the largest private shareholder register in the UK.
