The following is the full statement issued by Alliance & Leicester: The Board of Alliance & Leicester plc ("the Board") has terminated its merger discussions with the Bank of Ireland Group, which were announced on May 24th, as it has not been possible to agree satisfactory terms.
John Windeler, Alliance and Leicester Group Chairman, said:
"The Board unanimously believed that under the terms originally proposed a merger would have been a positive strategic move which would have brought shareholders a significant increase in long term value, and initiated talks accordingly. In the course of negotiations, however, it has become clear that despite the acceptance of the agreement which formed the basis of the joint announcement on May 24th, those terms are no longer acceptable to the directors of the Bank of Ireland. As a result they have requested changes to key items which had previously been agreed.
"Since Alliance & Leicester's business will not benefit from a prolonged period of uncertainty the Board has unanimously decided to bring the discussions to a close."
In line with the commitment given in its preliminary results announcement of February 26th, the Group will resume its planned share buy back programme which has been held in abeyance pending the resolution of the merger talks. This is consistent with the Group's stated aim of achieving a Tier 1 capital ratio of 8 per cent during 2001.
The Board remains determined to build on the Group's successful performance since conversion and anticipates announcing on July 23rd another strong set of results at the interim stage, with further growth in earnings per share and the delivery of significant cost reductions.
John Windeler concluded: "The Board would like to acknowledge the great efforts made by group chief executive Peter White and his team throughout the negotiations. We also thank the Financial Services Authority and the Central Bank of Ireland for their support.
"While we are disappointed that we have found it necessary to terminate the discussions, Alliance & Leicester remains firmly committed to its strategy of tight cost control and income growth generated organically and by acquisition or merger."
