ABN Amro could be in danger
16 April 2007, AMSTERDAM – Analysts think there is a good chance that Royal Bank of Scotland (RBS), Santander and Fortis will succeed in taking over ABN AMRO. The alliance could reportedly bring out a higher bid than British Barclays because the Dutch bank would be worth more split up than as a whole.
16 April 2007
AMSTERDAM – Analysts think there is a good chance that Royal Bank of Scotland (RBS), Santander and Fortis will succeed in taking over ABN AMRO. The alliance could reportedly bring out a higher bid than British Barclays because the Dutch bank would be worth more split up than as a whole.
The three banks have invited ABN Amro to hold "exploratory" talks about a takeover. ABN Amro says it is "carefully" considering the proposal. On Wednesday the period of exclusivity for merger talks between ABN Amro and Barclays expires.
The three banks (RBS, Santander and Fortis), sent a joint letter to ABN Amro last Thursday inviting it to enter talks. They would like the same opportunity as Barclays has had to investigate the bank's accounts. The three banks are supported in their request by activist shareholders like TCI, who want the bank to be sold to the highest bidder.
The three banks would reportedly split ABN Amro up after a takeover: Fortis would take over the investment banking division and activities in the Benelux, Royal Bank of Scotland would take over US retail bank LaSalle, and Banco Santander would incorporate the Italian and Brazilian activities of the Dutch banking group.
Analysts say splitting up the bank will yield more for shareholders than a deal with Barclays. Insiders told press agency Reuters on Saturday that the takeover would partly be financed by a trade of shares, and partly in cash.
Insiders also told the press agency that Barclays is under pressure from its shareholders not to pay too much for ABN Amro. A price between EUR 34 and 35 a share is regarded as realistic, which would give ABN Amro a market value of close to EUR 65 billion. More than EUR 35 a share would be too much reportedly.
The three cooperating banks however could pay as much as EUR 40 a share, say analysts. The takeover could be partly financed by selling off the parts of ABN Amro they do not want to continue to incorporate.
The prospective merger with Barclays will be voted on at the shareholders' meeting on 26 April.
ABN Amro announced the bank's first quarter figures today somewhat earlier than planned. These were scheduled for release on 26 April, but were published early because of the merger talks between ABN Amro and British bank Barclays.
Net profit increased by more than 30 percent in the first quarter to EUR 1.31 billion. Cost savings and a strong contribution from its home markets Brazil, Italy and Asia drove profits up.
[Copyright Expatica News + ANP 2007]
Subject: Dutch news