A series of meetings is planned but sentiment towards the proposed takeover continues to be negative

Bank of Ireland chief executive Mr Michael Soden met a number of large British investment institutions yesterday as the group continued to explain why it approached Abbey National.

A series of meetings is planned over the coming days but sentiment towards the proposed takeover continues to be negative.

Yesterday, Bank of Ireland shares turned weaker, in line with the overall drop in the Dublin market. The shares closed down 17 cents at €9.93 having traded as high as €1.20 earlier in the day.

Market analysts continue to point to the recovery in the bank's share price in recent days as reflecting the view that this deal will not go ahead.

Mr Soden and his senior management team are meeting a wide range of institutions, many of which are also Abbey National shareholders.

Abbey National shares were also weaker yesterday, closing at £6.65 (€10.50), down 20p.

Fund managers who have met the bank have had an opportunity to question the bank's strategic thinking but few believe its efforts will be rewarded.

Bank of Ireland is hoping to persuade the institutions to put pressure on Abbey National to engage in discussions on its proposed bid.

A number of fund managers suggested that Bank of Ireland would probably have to sweeten its offer to Abbey National to have any chance of success but questioned the merits of this for its own shareholders.

"It is unlikely to succeed. The focus now will move to Bank of Ireland's Plan B," according to one fund manager.

Investors want to know what the bank is planning if it fails to get Abbey National. In pursing this strategy fund managers are asking whether the bank believes that it now needs scale and whether the returns it is generating in the Irish market are sustainable in the future.

It has also raised questions about Bank of Ireland's British subsidiary Bristol & West. Some believe its approach to Abbey National is an admission that it does not have the scale to deliver growth for the bank. One suggested that it had become a "huge drag" on its earnings.

There is also a view that Bank of Ireland has made itself vulnerable to a takeover and will have to focus quickly on making acquisitions, possibly in the Irish market, in the near-term.

Mr Soden will be trying to impress shareholders that Abbey National has nothing to lose in meeting the Republic's second-largest bank to discuss its approach.

Abbey National has indicated that it is also meeting shareholders, although it has already dismissed the bid. It is expected to make a formal announcement on the deal by the end of the week.

The institutions, particularly those such as Fidelity, which have substantial shareholdings in both institutions, will have to weigh up the benefits of forcing any further progress.

Many may just use this exercise as a warning to Abbey National that it should give careful consideration to any takeover bids that emerge in the future and to weigh up Mr Soden and his offer.