National newspapers including the Daily Telegraph and the Financial Times are carrying reports claiming that the FSA has approached Spanish lender Banco Santander to take over the buy-to-let lender.
Santander, the parent of Abbey, added to its UK market presence with the buy-up of Alliance & Leicester in July for £1.2bn.
The FSA is also thought to have made contact with National Australia Bank and Dutch banking group ING in an attemot to drum up interest in the take over.
A spokeswoman from B&B says: “We are not aware of anything in connection with any of these banks. Our funding foundations are solid, and we are well-capitalised.”
The FSA has refused to comment.