ABN Amro suggests that, having been bitten once, Bank of Ireland would be shy about chasing a similar deal in Britain.
Research by ABN Amro Stockbrokers suggests that there is only a remote chance that Bank of Ireland will make a bid for Abbey National bank in Britain.
In a note on the company yesterday, the firm's financial analyst, Mr Eamon Hughes, said Abbey National would be a poor strategic and financial fit for Bank of Ireland.
"We believe that it is only a matter of time before Bank of Ireland management clarifies its lack of intentions towards Abbey National or investors themselves run their own numbers on a deal and see that the numbers don't stack up."
Mr Hughes points to the bank's previous efforts to acquire the Alliance & Leicester. Bank of Ireland shares fell by 20 per cent in the summer of 1999 after it announced it was in merger discussions with the British bank. These negotiations subsequently fell through, largely on investor concerns about the extent of control Bank of Ireland would be able to exert in the enlarged British and Irish financial institution.
"We recognise that 'fear of a deal' in this volatile market could weigh on investor sentiment."
The resignation of Abbey National chief executive Mr Ian Harley has generated speculation that the bank could be taken over. Most of the British banks are precluded from approaching Abbey National because of competition issues in that market.
Bank of Ireland is focused on the British market for expansion but its chief executive, Mr Michael Soden, has stressed it is more interested in acquiring skill-based businesses than making large-type acquisitions. It has been acquiring businesses in the financial services advisory sector to complement and support its Bristol & West subsidiary.
