Shareholders approve ABN AMRO buy
7 August 2007, AMSTERDAM (AP) - Fortis NV shareholders on Monday overwhelmingly approved the company's plans to participate in a consortium bidding EUR 70.6 billion for ABN AMRO Holding NV and hold a major share issue needed to finance its part of the deal.
7 August 2007
AMSTERDAM (AP) - Fortis NV shareholders on Monday overwhelmingly approved the company's plans to participate in a consortium bidding EUR 70.6 billion for ABN AMRO Holding NV and hold a major share issue needed to finance its part of the deal.
The Fortis vote greatly boosts the chances that the Royal Bank of Scotland PLC-led consortium will win the bidding for ABN AMRO, besting a rival offer by Barclays PLC worth around EUR 63.7 billion. Either takeover would be the largest in the financial industry's history.
Barclays' bid was formally launched Monday, and it also won EU regulatory approval for its plans.
Separately, ABN AMRO said it would hold a shareholder meeting 20 September to debate the merits of the two bids. The consortium has already launched its bid, contingent on approval from Fortis and RBS shareholders. Shareholders of the third consortium partner, Banco Santander Central Hispano SA of Spain, have already given approval.
Due to the Belgian-Dutch bank's dual headquarters system, separate shareholder gatherings were required in both Brussels, Belgium, and Utrecht, Netherlands - but each approved the key motions by a margin of more than 90 percent.
"I want to thank you from my heart for your trust," Chairman Maurice Lippens said after the poll. "You have spoken with a massive vote."
He called the deal a "unique opportunity" for Fortis.
Fortis' prospective share of the deal is EUR 24 billion, a huge purchase for a bank which itself was worth just EUR 37.1 billion as of Friday.
If the consortium bid wins, Fortis will acquire the bulk of ABN AMRO's Dutch operations, and its wealthy private clients and asset management businesses worldwide.
The Fortis board says that, mostly due to cost savings from combining the two companies' operations, the deal will add 4.3 percent to its earnings per share by 2010, though it will hurt earnings in the short run due to restructuring costs.
The prospect of the dilution - and the risk that the deal could turn sour - has already led to a 14 percent decline in Fortis shares since the start of the year.
One shareholder protested the decision at the Brussels meeting as "dilutive" and "value destroying," but he was eventually booed down.
Analysts had predicted Fortis' shareholders would approve the takeover, but thought the share issue might be a close call: if it were blocked, Fortis' share price would almost certainly shoot higher, netting the "blockers" a quick profit.
As it turned out, Fortis shares fell 1.5 percent to EUR 28.05 after the vote on prospects for dilution, while ABN AMRO shares rose 0.7 percent to EUR 35.29 as the RBS bid of EUR 38.08 per share looked more likely to prevail.
RBS shares fell 1 percent to 569.5 pence (EUR 8.44) in London, where Barclays rose 0.3 percent to 681 pence (EUR 10.10).
Analysts believe the consortium will now almost certainly win ABN AMRO, given that its offer is worth so much more than Barclays' - barring objection from regulators. Fortis Chief Executive Jean-Paul Votron said in Utrecht that he believed the deal would be approved by Dutch and European regulators, but there were "no guarantees."
Barclays says its deal is still attractive because it will provide greater growth in the long run, despite the lower value. Its shares would need to rise by around 20 percent in the coming month for its bid to be as high as that of the RBS consortium.
The Barclays bid was cleared Monday by EU antitrust regulators, who said there were only limited overlaps between the two businesses - they are both active in British corporate banking - and they would face "sufficient competition" from a number of rivals.
[Copyright AP 2007]
Subject: Dutch news