The field has been left open for Santander Central Hispano's takeover of Abbey National after weeks of speculation ended with HBOS ruling itself out of the bidding.
HBOS says its bid for Abbey was abandoned because it sees better prospects for shareholder value in developing its existing business. It is also believed that HBOS analysts decided that a battle with the Competition Commission and the regulators could prove lengthy and carry a high risk of failure.
Deutsche Bank analyst Nick Lord says it is unlikely anyone else will launch a counter-offer, with the closing date for counter-bids being September 30.
The retreat now leaves Santander Central Hispano with no challenges to its £8.55bn bid. The European Competition Commission has given Santander clearance for the deal. The bank says it will get a market listing in London if the deal is completed.
A general meeting of Abbey shareholders is scheduled on October 14, where Santander needs to secure 75 per cent of the shareholders' approval.
Santander has said it would provide a free dealing facility for investors with less than 2,000 Abbey shares for the first six months after the deal's completion.
This would ensure that investors could cash in their holdings without fees before SCH's London listing. Once it is listed, it would provide quarterly dividend payments in sterling to its investors in the UK.
SCH consumer finance chief executive Juan Inciarte says: “This is a fully recommended bid by the board of Abbey. Both boards fully support the bid and I think it is a fair price for both.”
Chadney Bulgin IFA David Thomas says: “I am happy that things have worked out like this – it is for the good of the market. I think HBOS got to a point where they realised they could not go head to head with the Competition Commission for 12 months with the risk of losing.”