ABN Armo rejects Barclays and RBS offers

by Gill Montia

Story link: ABN Armo rejects Barclays and RBS offers

Barclays’ bid for ABN Amro, the Dutch bank, has been rejected by the board of ABN, which has also turned away a higher competing bid by a consortium led by Royal Bank of Scotland (RBS).

The Dutch bank had previously been in favour of the Barclays bid, which is mostly in shares, and was worth €63.9 billion at the closing share price on Friday of last week.

The RBS bid was worth €70.5 billion and if either are successful in making the acquisition, it will be the largest takeover ever in the financial sector.

Barclays has recently improved its position by negotiated a strategic alliance with China Development Bank, and this could provide enhance opportunities for a combined Barclays/ABN Amro group.

With regard to the rejection of the RBS bid, a statement from ABN referred to unresolved questions around the consortium’s proposals to breakup the ABN group.

Under these proposals, Fortis NV of Belgium would take ABN’s Dutch operations, Banco Santander of Spain would take its Brazilian and Italian businesses, and RBS would retain the rest, including ABN’s investment banking division.

The battle for the takeover of ABN began in March and has involved a rebellion by ABN shareholders and rulings by the Dutch Supreme Court.

Barclays is still saying that it is confident that ABN’s board will eventually endorse its takeover bid and sector analysts expect Barclays to wait for an improvement in its share price and then seek renewed support from the ABN board.