Alliance and Leicester sends shareholders voting packs for Santander deal

AandL shareholders are encouraged to use their vote before the deadline of 14 September.

The Board of Alliance and Leicester unanimously recommends that shareholders vote in favour of the deal.

Today, Tuesday 19 August, Alliance and Leicester is sending its shareholders full details of the proposal for the recommended acquisition of Alliance and Leicester plc by Banco Santander.

The recommended acquisition was announced on 14 July and shareholders were sent a copy of the announcement.

The pack being sent today provides details of the recommended deal, the timetable and information on the Court Meeting and Extraordinary General Meeting (EGM), both scheduled for the 16 September, as well as the voting forms.

There's also a 'Shareholder Voting Information' booklet which includes a letter from Alliance and Leicester's Acting Chairman, Roy Brown, a guide on how to vote by post or online, and Questions and Answers.

Alliance and Leicester is encouraging all shareholders to vote.

The Alliance and Leicester Board is unanimously recommending that shareholders vote in favour of the acquisition.

The Board believes the greater stability and greater certainty offered by being part of the Santander Group, as well as the good strategic fit, represents value for shareholders.

Roy Brown, Acting Chairman of Alliance and Leicester, comments: "We strongly encourage all Alliance and Leicester Shareholders to exercise their voting rights.

It is particularly important that as many votes as possible are cast at the Court Meeting so that the Court may be satisfied that there is a fair representation of Alliance and Leicester Shareholders' opinion." Shareholders can vote by post, online or in person.

Voting by post: Shareholders wishing to vote by post need to ensure that their relevant voting forms are received by the Registrars by 11 am on Sunday 14 September.

In practice this means they will need to arrive in the post by Saturday 13 September at the latest.

Votes are not being accepted by fax or email.

Voting online: Shareholders will be able to vote online, by logging on to the shareholder website: www.alliance-leicester-shareregistrars.co.uk, using their investor code, as normal.

Voting in person: Shareholders will also be able to vote in person at the Court Meeting and EGM.

These are scheduled to take place on Tuesday 16 September at 11.00am and 11.10 am respectively at the International Convention Centre (ICC) in central Birmingham.

(However, shareholders are urged to vote by post or online even if they do plan to come along to the meetings, as your final vote is the one that counts.) A helpline has been set up for shareholder questions: Alliance and Leicester has set up a Shareholder Helpline on 0844 842 9586, available from 9 am to 8 pm, Monday to Friday, which can deal with shareholders' questions but cannot offer advice as to how to vote.

If shareholders are in any doubt as to action they should take, they should seek independent professional advice from a stockbroker or independent financial adviser.

What happens once shareholders have voted: The recommended acquisition will take place if, subject to other approvals: a majority in number of AandL shareholders present at the Court Meeting (voting in person or by proxy) vote in favour; and this majority holds 75 per cent or more in value of the AandL Shares held by those AandL Shareholders present and voting at the Court Meeting (in person or by proxy).

It is also necessary for the resolution at the AandL EGM to be approved by shareholders holding not less than 75 per cent of the votes cast at the meeting (whether in person or by proxy).

As well as the AandL shareholder vote, other conditions need to be satisfied.

These include regulatory and anti-trust approvals, approval by Banco Santander shareholders and sanction of the scheme by the High Court.

These conditions are expected to be satisfied in the weeks following the EGM.

What shareholders will receive Under the terms of the acquisition, Alliance and Leicester ordinary shareholders will receive one new Banco Santander Share for every three Alliance and Leicester Shares.

In addition, as announced on 1 August, Alliance and Leicester will be paying an Interim Dividend of 18 pence per AandL ordinary Share.

The Interim Dividend will be paid on Monday 6 October to all shareholders who held AandL Shares at close of business on Friday 5 September 2008.

(If shareholders sell their AandL Shares before 5 September they will not be entitled to receive the Interim Dividend.) The offer values Alliance and Leicester shares at 317 pence each at 8 August 2008.

Including the dividend of 18 pence per share, this gives a total value per share of 335 pence, which is a premium of 52.6 per cent to the AandL share price of 219.25 pence on 11 July 2008, the business day prior to the commencement of the Offer Period.

The acquisition is unanimously recommended by AandL's Board: The offer has the unanimous support of the Alliance and Leicester Board.

The AandL Board, which has been so advised by JPMorgan Cazenove, Morgan Stanley and Rothschild, considers the terms of the acquisition to be fair and reasonable.

Roy Brown comments: "The Alliance and Leicester Board believes that the terms of the acquisition are in the best interests of AandL Shareholders as a whole and unanimously recommends that AandL Shareholders vote in favour of the resolutions to be proposed at the Court Meeting and the AandL EGM." Roy Brown continues: "The proposed acquisition would bring together in the same group two well known UK banks and create a more effective competitor in UK financial services.

The AandL Board believes that the combination of AandL and Abbey (Banco Santander's UK subsidiary) is an excellent fit.

The combined business in the UK will have 959 branches, a larger and therefore more competitive market share of key personal financial service products and a growing business banking franchise, with Banco Santander providing additional stability and resources to leverage AandL's franchise.

"The result will be a stronger UK banking franchise that will benefit our customers and employees.

It represents value for AandL Shareholders by providing both greater stability and greater certainty in these uncertain times.".

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