Bank of Ireland is offering a cash sweetener of up to £1.5 billion sterling inits proposed £15 billion merger with Britain's sixth-largestbank Abbey National, newspapers reported today.
The Businesssaid Bank of Ireland would make an announcementon its proposals tomorrow.
Bank of Ireland declined to comment on the reports butsources in Dublin financial circles said the bank was determinedto scotch the idea in the market its offer was a nil-premium one.
"The bank was very surprised and disappointed that marketsand the media latched onto the idea that this was a nil-premiumoffer," one source said.
Abbey National rebuffed Bank of Ireland's rumourednil-premium merger last week and vowed to push on with its ownrecovery plan. But investors had expected the Irish bank tocontinue its pursuit.
Bank of Ireland has yet to spell out the terms of its mergerproposal, which would create Europe's 11th largest bank with amarket capitalisation of about $22 billion.
The Sunday Telegraphsaid Bank of Ireland will announce plansearly this week to offer up to £1.5 billion cash tosweeten the share swap and will outline potential cost savingsand revenue gains of £300 million by combining the groups.
The Sunday Times said the cash element would be more like £1billion.