ANALYSIS: In its move to buy Abbey National, Bank of Ireland looks like it has been wrong-footed once again and has embroiled itself in a takeover battle it will almost certainly lose, writes Siobhán Creaton.

Investors have given a clear signal to Bank of Ireland that they do not like or support its efforts to buy Abbey National. Yesterday the Abbey National board decisively dismissed its approach and Bank of Ireland shares fell another four per cent, yet Ireland's second biggest bank is refusing to accept defeat.

There is a sense of dejà vu about all of this. Just as its failed attempt to merge with Alliance & Leicester three years ago badly damaged its credibility, investors are again questioning the thinking behind this latest foray and are deeply unhappy. Bank of Ireland looks like it has been wrong-footed once again and is embroiled in a battle that it will almost certainly lose.

Following the terse rejection from Abbey National, the Irish bank was quick to communicate its "surprise" at having its bid dismissed before it had an opportunity to discuss it with Abbey National's board of directors. It is not giving up and has indicated that it will shortly reveal the full details of its takeover proposal as a last-ditch attempt to win market approval.

This is expected in the next few days but most market observers suggest it would take a miracle to get Mr Michael Soden and his colleagues' legs under the Abbey National boardroom table.

Abbey National's antipathy towards the Irish bank is palpable. The former building society, which last year saw off a bid from Lloyds TSB, has suggested it has given Bank of Ireland's proposal as much consideration as it intends to and the matter is now closed. One source derided Bank of Ireland's attempt at forcing its hand by presenting its proposals to the markets as nothing more than a "fit of pique".

For its part, Bank of Ireland, is upset at its bid being described as having a "nil-premium", which was an immediate turn-off for Abbey National shareholders.

According to its statement, Abbey National would have received details of the proposed bid on September 19th. At that stage, Abbey National's share price was trading at £6.10 sterling, significantly higher than the £5.05 price at which they were trading last week just before news of the bid was leaked. Some sources have suggested that it was never a nil-premium bid, which would indicate that it was pitched above £6.10, representing a 10 per cent premium to yesterday's closing price of £5.54.

Some analysts believe it will take a bid of £7.35 sterling a share for the markets to pressurise Abbey National into re-establishing talks with the bank. But there are also other issues to be tackled.

Its decision to chase Abbey National has left many analysts and shareholders scratching their heads and wondering just what Mr Soden's intentions are for the bank. When he took over as chief executive last March, he initially floated the notion of merging with AIB despite the huge regulatory and competitive obstacles that would have to be overcome.

Now he wants to re-position the bank and make it a major European player by taking over a bank that won't even talk to him.

And then there is the City of London, which still remembers the Alliance & Leicester debacle. The British media were scathing in their coverage of the bid and particularly of Mr Soden this week. The Daily Telegraph suggested he must have swallowed "poteen" before suggesting a merger with AIB. It speculated that Abbey National would tell the bank to "begorrah off".

The Independent quoted one market observer as saying that Mr Soden had in fact made Bank of Ireland look vulnerable to a takeover. "This is not Riverdance - you need a bit more fancy footwork in the City."

Mr Soden's predecessor, Mr Maurice Keane, was subjected to similar abuse and criticism during the Alliance & Leicester bid.

The bank was always going to find it difficult to conquer a British bank. Mr Soden should be prepared for a rough ride or pray for a miracle.