LARGE British investors have in the past few days been reducing their holdings in Abbey, which on Monday agreed an £8 billion takeover by Spain’s Santander Central Hispano, because internal fund rules prevent them from holding shares in European companies.

Those selling some, or all, of their shares in the UK’s sixth biggest bank include Standard Life, Fidelity, Schroders, UBS, HBOS, Aviva and New Star Asset Management.

Standard Life, the life insurance company, sold nearly all its shares, representing just under 1 per cent of Abbey’s capital, as did New Star Asset Management, the fund manager.

Tim Bray, who manages a high-income fund for New Star, said: “I have very mixed feelings about this. A UK bank could definitely pay more, but it could be blocked (by the competition authorities). They (Santander) are paying a pretty full price, I think it is prudent to take the money and run.” Standard Life has sold more than 12 million shares since the bid was announced on Monday. The life company would not comment on the reasons for the sell-off.

Fidelity, one the world’s biggest investment managers, has also been cutting back its stake. In the past two days it has sold 11.2 million shares, although it still holds 16.5 million shares, or 1.1 per cent, of the Abbey.

Schroders, one of Abbey’s biggest investors, has also been trimming its stake. It, too, is bound by rules over the proportion of shares it can hold in European companies.

Despite the share sales, Abbey’s shares gained 5.5p yesterday to close at 572.5p, 3.3 per cent above the bid price, which values Abbey at 554p. Dealers still believe another bidder could emerge for the bank, which has been the target of three takeover attempts in the past three years.