Blade Watch

http://www.ft.com/cms/s/0/a364e3b6-5204-11dd-a97c-000077b07658.html

Spain’s Santander was last night confident of clinching a £1.26bn (€1.57bn) takeover of the UK’s Alliance & Leicester, just seven months after the British bank passed on a deal which could have valued it at more than double yesterday’s price.

A&L’s shareholders were left pinning their hopes on a rival bid for the beleaguered UK banking group after its board of directors recommended Santander’s bid.

Shares in the bank leapt to 335p, 17p above the price implied by Santander’s all-share offer, as investors speculated that other lenders may be tempted to launch a counterbid. But bankers last night said only a handful of institutions – including Lloyds TSB and National Australia Bank – would be in a position to mount a significant challenge to Santander, and questioned whether these banks had the appetite to start a bidding war.

It will be interesting to see how the deal develops, what value proposition results for the various shareholders and stakeholders involved. There have been some interesting articles about how it seeks to consolidate some of A&L’s costs, we’ll have to see, that revenue generation, of profitability maintained and exceeded is core to these kind of deals, everything else is noise.

The following activities could be used to aid in reducing IT costs:

• Consolidation of IT and application infrastructure – one common platform/application and infrastructure suite
• Data center consolidation – fewer live and bcp data centers providing the same business function
• Server decommissions and virtualization/consolidation – do more with less.

We’ll have to see.

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