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Shares in Alliance & Leicester were forecast to open 50p, or 8 per cent, higher on Wednesday following what have cheerfully been described as “reports” that Spain’s acquisitive Santander held abortive takeover talks with the British mortgage bank.

In the event, in early trade, A&L stock spiked as high as 721p - a gain of more than 11 per cent.

So, for those assessing the real likelihood of this deal, here’s the media timeline, with relevant extracts.

On the evening of December 30, writing from Madrid for FT.com, Leslie Crawford revealed:

Grupo Santander, the owner of Abbey National, was in talks this month to buy another UK mortgage lender but negotiations stumbled on price and came to nothing, according to people close to the bank. The Spanish lender is also understood to have turned down the assets of Northern Rock, the UK bank that ran into trouble with the credit crunch.

The talks were part of Santander’s desire to complete its global footprint that has led it to examine the current turmoil in the financial markets for buying opportunities. “We are very close to our ideal size now,” Emilio Botín, Santander chairman, told the Financial Times after a year in which the Spanish group became the world’s eighth-largest bank.

The news emerged during an interview with Santander’s Emilio Botin.

Doing its straightforward job of smoking out Santander’s likely UK target, the London equity market pushed shares in A&L 1.6 per cent higher the next day, causing the FT’s Neil Hume and Michael Hunter to write, on the morning of December 31:

Alliance & Leicester managed to buck the trend as London market drifted lower on the final trading session of 2007. The mortgage lender was the second worst performer in the banking sector in 2007 year, losing 43 per cent. (The biggest faller was Northern Rock, which slumped 93 per cent).

However, A&L rallied 1.3 per cent to 648p on Monday amid speculation that it was the mortgage provider that Banco Santander, the Spanish owner of Abbey, considered buying last month. The talks stalled over price, according to a report in this paper.

And in the final hour of 2007, the Daily Telegraph, declared:

Mortgage bank Alliance & Leicester held takeover talks with Grupo Santander, the Spanish owner of Abbey National. Grupo Santander is understood to have held tentative discussions with A&L in early December about a possible deal that is likely to have valued the British mortgage bank at more than pounds 2.7bn.

However, the negotiations are thought to have faltered after the parties failed to agree a price. The pair are understood no longer to be in active discussions, although news of the preliminary talks could ignite new speculation that A&L could once again be a bid target.

And on Wednesday, bringing us up to date, the FT added:

Santander, the Spanish bank which held abortive take-over talks with Alliance & Leicester has not ruled out resuming negotiations with the UK mortgage lender. Santander, which owns UK lender Abbey National, broke off negotiations with A&L after a weekend of intense negotiations in mid-December. The negotiations are understood to have stumbled on price and came to nothing.

The negotiations were well advanced, with Spanish bankers in the UK informing Emilio Botin, Santander’s chairman, hourly on the advance of the talks. However, the deal fell through because the price the Spaniards were prepared to offer was not attractive enough. However, the Spanish bank is not thought to have ruled out coming back with an improved offer, according to people close to the situation.

FT Alphaville’s moral here: “Don’t hold yer breath.”