Abbey merger: £18m spent on Slaughters, print and postage

With the High Court set to approve the Abbey National- Santander Central Hispano (SCH) merger today (8 November), it has emerged that Abbey spent around £9m sending out legal documentation to its 1.8 million shareholders.

It is thought that Abbey’s law firm Slaughter and May will get around the same amount as the bank spent on printing and postage.

To the chagrin of smaller shareholders, Abbey and SCH spent around £121m on advisory fees, with the largest chunk going to investment banks.

Because the merger is via a scheme of arrangement under the Companies Act, Abbey had to send out the full 400-page merger agreement to all its shareholders at a cost of £5 each.

However, the structure means that SCH could save £40m in stamp duty. A spokesperson for Abbey stressed that the reason for using the scheme was strategic rather than tax-related.

The paper for the documentation was pre-ordered at great expense, and when the contract was expanded there was not enough paper to accommodate it.

One source said: “There was a serious question about whether there was enough paper in the country to do this deal.” Ultimately, the font size was reduced to make everything fit.