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Lloyds may try hostile takeover of Abbey Nat

Lloyds TSB has taken a further step towards a hostile takeover bid for Abbey National by submitting a merger notice to the Office of Fair Trading.

Details of the proposed acquisition were given to the OFT last Friday. The OFT has until February 2 to consider the regulatory implications.

A merged Abbey and Lloyds would account for around 23 per cent of the UK mortgage market, which industry observers say is on the boundary of competition limits.

The OFT is likely to recommend one of three opt ions to Trade and Industry Secretary Stephen Byers, who will make the final decision. It can recommend that Byers clears the deal, refer it to the Comp etition Commission or seek undertakings in lieu of a referral.

This would mean the OFT would try to iron out any minor problems with both banks.

Abbey has rejected two friendly bids from Lloyds, worth around £18bn, on the grounds that both were “unattractive”. It believes a deal with Lloyds would cause thousands of redundancies as there are many areas of overlap between the two banks.

Lloyds&#39 move comes just weeks after Abbey and Bank of Scotland submitted proposals for their own merger, which the OFT will rule on within the next two weeks.


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