French bank Credit Agricole said today it was considering making a takeover bid for UK bank Alliance & Leicester (A&L) but had not made any approach.
A&L has for many months been seen by analysts as the most likely takeover target amongst UK banks, prompting speculation that Credit Agricole or Spain's Santander could launch a bid worth over £6 billion.
Agricole said it was assessing A&L, "amongst others, but would note that its evaluation is at a preliminary stage."
The statement followed a weekend newspaper report saying Agricole had appointed Citigroup to advise it on a possible £6 billion bid.
A&L shares leapt over 10 per cent after the statement to £12.63, near their record peak of £12.77 earlier this month and valuing the bank at more than £5.5 billion.
By this morning they had eased back to £11.80, up 6 per cent, while Agricole's shares were down 1.2 per cent at €29.94, alongside sharply weaker European stock markets.
A&L had no immediate comment.