Newspaper article The Evening Standard (London, England)

Brokers Up Targets but A& L's Retreat Goes On

Newspaper article The Evening Standard (London, England)

Brokers Up Targets but A& L's Retreat Goes On

Article excerpt

Byline: MICKEY CLARK

BROKERS have had to review their ratings for Alliance & Leicester in thewake of the recommended [pounds sterling]1.3 billion offer from Spain's Banco Santander.

Shares in the troubled mortgage lender today retreated 11p to 324p but remainabove the 317p, including dividend, being offered by Santander. Cityspeculators argue that the Spanish bank is looking to buy the business on thecheap, and expect another bidder to emerge.

Some say Lloyds TSB may throw its hat into the ring. It already owns theCheltenham & Gloucester brand, and may be looking to increase its share of thedomestic mortgage market.

Goldman Sachs has switched its rating on A& L from sell to neutral and removedthe shares from its conviction sell list while Societe Generale has lifted itstarget from 230p to 299p.

But it continues to rate them a sell.

Dresdner Kleinwort has raised its rating on the mortgage lender from sell tohold. It expects the deal with Santander to go ahead, saying the shares shouldtherefore continue to trade close to the Santander offer.

Credit Suisse has moved from underperform to neutral while Keefe, Bruyette &Woods has moved from underperform to market perform. It says the offer providessome bedrock to the A& L share price.

Banks generally turned easier along with the rest of the market, which wasworried by the outlook for the sector amid fears another financial institutionmay be in trouble. Bradford & Bingley, still looking at ways of refinancing,slipped 1 . 2 p to 52 1 . 2 p while Royal Bank of Scotland shed 10.1p to169.9p.

Shares generally dropped back below 5300 after a lukewarm response to the USTreasury's proposed rescue package for Fannie Mae and Freddie Mac, which led toanother sell-off in New York last night and fresh falls in the Far East thismorning. …

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