Reports that Bank of Ireland is preparing to top Halifax's £780 million sterling bid the Birmingham Midshires Building Society in the UK are being treated with some considerable scepticism by Irish market sources.

Bank of Ireland has declined to comment on the speculation of a bid. But market sources believe that, given the scale of the Halifax bid, Bank of Ireland would find it difficult to pay in excess of what Halifax has offered, whatever the attractions of Birmingham Midshires.

Sources close to the bank said that whenever a British building society comes on the market, Bank of Ireland is inevitably linked with a possible bid, given the bank's expressed preference for another British building society to complement its highly successful £600 million takeover of Bristol & West Building Society two years ago.

However, Bank of Ireland has also made it clear that it will only buy if the price is right. Sources believe that in the case of Birmingham Midshires the price is definitely not right for the bank, with many analysts believing that Halifax has offered a very rich price for Birmingham Midshires.

Sources said that Bank of Ireland would probably have been comfortable with the £630 million price which was the original agreed offer for Royal Bank of Scotland, before the Halifax approach led Birmingham Midshire to seek a release from its existing arrangement with RBS.