Crosby crashes the fiesta

IT would have been quixotic of Don Emilio Botin, the patrician boss of Spain's Banco Santander, if he ever thought it would be easy to take over Abbey.

There is a growing clamour among leading City shareholders for James Crosby of HBOS to enter the joust against Don Emilio.

It is too early to say how an HBOS bid might be structured, but Crosby is likely to offer shares, plus a bigger chunk of cash than Santander's payout, which disappointed the City.

Crosby, who would like to finesse an agreed bid, is unlikely to show his hand before next month.

In the meantime, he will almost certainly be seeking talks with Abbey bosses in the hope of replacing the Spaniards in their affections.

He can argue that Abbey's 1.8m small shareholders would be much more comfortable with a familiar British institution than with Santander. Indeed, many are already investors in both banks, so would simply be consolidating their holdings.

The HBOS chief can also go on the offensive over Santander's corporate governance.

The Spanish bank is highly rated on governance by Continental research groups. Nonetheless, the iron dominance of the Botin family over the board and the huge potential payoffs to directors of up to five times their salary would cause uproar in a UK company.

An all-British deal would provide greater opportunities for squeezing out extra value than a crossborder merger where the overlaps are more limited.

As for jobs, the trade unions appear to be lining up behind Santander. But Crosby, who is on a single-minded mission to beat the Big Four to a pulp, can point to the fact that he has increased HBOS's net UK headcount by several thousand since Halifax took over Bank of Scotland in 2001.

There are, however, some serious pitfalls. Santander might be prepared to increase its offer to blow Crosby out of the water. At the least, it would net an £81.7m break fee from Abbey if it is jilted.

But competition issues are the big grey area. A combined HBOS/Abbey would have around 34% of the mortgage market. Not a problem, argues the HBOS camp, because mortgages are subject to the most cut-throat competition of any financial product.

In business and personal current accounts, where concerns led to the derailment of Lloyds TSB's bid for Abbey four years ago, the combined market share of the two mortgage banks would be small.

But there is no guarantee that the regulators will rule along the lines HBOS predicts, and the rest of the Big Four are highly unlikely to sit on their hands. Lloyds TSB, Barclays, RBS and HSBC may well be inclined to pile in, even if only to stir the pot.

That would leave Abbey in limbo for months on end. Staff and customers would defect and the group's value to an eventual owner would dwindle.

If Crosby does capture his old arch rival Abbey, it would be a sweet triumph - but there is a long way to go.

Supermarket sweep

J SAINSBURY's purchase of the Jacksons convenience store chain is likely to put the competition regulators in a tizz.

The authorities fear that the big players, which are effectively barred from major bids in the UK, may achieve a creeping increase in their market shares through smaller deals like this one.

The deal looks sensible enough from Sainsbury's point of view, though it does not do much to address the daunting problems facing new chief executive Justin King.

Sainsbury, itself tipped as potential takeover prey for US giant Target, is struggling to compete-on price with the likes of Asda and Tesco without alienating its core middle-class customer base, which is preoccupied with quality.

Initiatives by his predecessor, Sir Peter Davis, including a £3bn investment in distribution, failed to do the trick. The City is still waiting for King to set out his stall.

Cazalet chronicles

IT is always heartening to see old enemies kiss and make up.

So the insurance industry will be cheered by the news that Standard Life has hired Ned Cazalet, one of the sector's most influential figures - and for many years a fierce critic of the Edinburgh institution.

Cynics might suspect Standard is simply hoping to gag the maverick analyst.

But the once-arrogant company, which has been forced to abandon mutuality to shore up its capital, is a more chastened outfit of late.

Let us hope the bridge-building with Cazalet is a sign it has changed its ways.