RBS-led consortium rebids on ABN Amro
16 July 2007, AMSTERDAM (AP) - A trio of banks led by Royal Bank of Scotland PLC said Monday it would rebid EUR 71.1 billion for ABN Amro Holding NV, as the largest takeover battle in the history of the financial industry continues.
16 July 2007
AMSTERDAM (AP) - A trio of banks led by Royal Bank of Scotland PLC said Monday it would rebid EUR 71.1 billion for ABN Amro Holding NV, as the largest takeover battle in the history of the financial industry continues.
The proposed bid of EUR 38.40 per share, mostly in cash, would be worth at least 10 percent more than an all-share rival bid by Barclays PLC, RBS and its partners said.
Analysts from Bear Stearns said the new offer may be a knockout blow to Barclays' chances of winning ABN.
"Barclays can't raise its offer to get near the consortium's level, can't match the cash component," they said in a research note.
"We think Barclays should walk away and take the plaudits," adding that at this point, Barclays' share price would probably benefit from losing the fight.
In Amsterdam, ABN Amro shares opened 3.4 percent higher at EUR 37.08, closer to the RBS-group bid than the Barclays' bid.
Barclays' shares gained 2.3 percent to 741 pence (EUR 10.94) - at that level, its bid for ABN is worth EUR 35.14 per share.
The total offer is almost unchanged from an earlier bid proposed by the RBS group, even though ABN Amro last week won permission from the Dutch Supreme Court to sell Chicago-based LaSalle Bank Corp. to Bank of America Corp. for USD 21 billion (EUR15.5 billion).
That sale was widely seen as advantageous to a merger with Barclays, which ABN Amro's management had already agreed, since RBS had wanted LaSalle.
But now that the LaSalle sale to BofA is certain, "the banks will remove preconditions and conditions relating directly to the LaSalle situation," RBS, Fortis NV of Belgium and Banco Santander Central Hispano SA. said in a statement.
"The acquisition of the ABN Amro businesses remains compelling from a financial point of view, as evidenced by the fact that it produces essentially the same earnings enhancement for the group, despite the smaller size of the transaction," said RBS Group Chief Executive Fred Goodwin.
Even without LaSalle, RBS is interested in ABN Amro's investment banking operations and the rest of its global operations unclaimed by Fortis or Santander.
Fortis wants ABN's Dutch arm, while Santander wants its Italian and Brazilian operations.
The three said they "have received assurances from ABN Amro that their proposed offer will be dealt with on a level playing field," - in other words, that ABN will no longer attempt to prefer the Barclays bid.
The new offer from the RBS group includes EUR 35.60 cash plus 0.296 New RBS shares - slightly more cash than last time.
RBS shares gained 1 percent to 646.5 pence (EUR 9.55).
Barclays has until July 23 to raise its offer. Analysts from Rabo Securities said Barclays may try, but that the British bank is "not a serious alternative" to the RBS group any more.
[Copyright AP 2007]
Subject: Dutch news