Christmas windfall for Abbey investors

ABBEY'S shareholders are picking up a £460m Christmas windfall after new owner Banco Santander settled the cash element of its £9.5bn takeover.

The Spanish bank paid 31p in cash on top of one of its shares for each one held in Abbey. An investor who received 200 free shares when Abbey demutualised in 1989 will pick up £62.

The bank is offering a free dealing service for investors who want to cash in their Spanish shares.

Many of Abbey's 1.7m small shareholders are unsure whether to hang on to the stock. Just under 10% have requested packs outlining how to sell shares.

Abbey's new chief Francisco Gomez-Roldan has reshuffled management. He has also combined back-office activities with IT to form a manufacturing division which will bear the brunt of £300m planned cost-cuts. Investors approved the takeover of Abbey at an extraordinary general meeting in October, despite fierce opposition from small shareholders.The former building society floated in July 1989 at ?1.30 per share, and finally fell into the arms of Banco Santander at ?6.50 per share. The share price peaked at more than ?14 in 2000 before the stock market began a long decline.