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Updated to include M&T spokesman's decline to comment.



) --

M&T Bank

(MTB) - Get M&T Bank Corporation Report

shares surged as much as 9.5% shortly before the market closed, on speculation that the renewed talks between the big regional and

Banco Santander

( STD) are moving forward.


is reporting that M&T is considering selling a majority stake to Santander, which would include the Spanish bank's purchase acquiring

Allied Irish Bank's


22% stake in M&T, citing sources who spoke on anonymity, because the talks are not yet public.

Banco Santander is reportedly in discussions with the

Federal Reserve

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and could hear by the end of the month,



An M&T spokesman said the bank does not comment on rumors or speculation to



Banco Santander has been eyeing M&T, one of the best run U.S. regional banks, for some time as a way to bolster Sovereign Bank, its fledging U.S. business. While M&T and Santander were in discussions earlier this year, no deal was made. One of the

major hang-ups to agreeing on a merger

was the issue of control. M&T is fiercely independent; its management team run by longtime chairman and CEO Robert Wilmers, who is 75.


is reporting that under the new deal, some element of control will be retained by M&T.

M&T shares closed up 5% to $91 on higher than average trading volume of 1.98 million shares. Banco Santander's stock closed up 1.6% to $12.87 on the

New York Stock Exchange

. Allied Irish shares also traded modestly higher on the



--Written by Laurie Kulikowski in New York.

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Laurie Kulikowski


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