RBS and Allies Step Up Pressure on ABN
By Jim Stanton Business Editor
THE management at Dutch bank ABN Amro came under mounting pressure today, facing the prospect of both a hostile takeover move by an RBS-led consortium and potential legal action from a shareholders rights group.
RBS and its consortium partners, Spain’s Banco Santander and Belgian-Dutch bank Fortis, said they had notified the supervisory and managing boards of ABN Amro “of their intention to make a public offer for 100 per cent” of ABN shares.
It wants to meet with the Amsterdam-based bank’s board as soon as possible, although it is understood the banks have not yet signed a controversial confidentiality agreement that would allow them access to ABN’s books.
James Hutson, an analyst at Keefe, Bruyette & Woods, said RBS “clearly now want to move quickly”. While RBS said the move was “procedural”, it will be interpreted as a firm indication that the Scottish bank and its allies are serious about landing ABN, scuppering its agreed GBP 45 billion takeover by Barclays and foiling another GBP 10.5bn agreed sale of its US arm LaSalle to Bank of America.
At the same time, a spokeswoman for Dutch shareholder rights organisation VEB confirmed the request for an injunction to freeze the sale of LaSalle had been filed at the Amsterdam District Court. At stake is the biggest ever banking industry takeover.
The RBS consortium wants to split ABN up, with the Edinburgh- headquartered bank securing the LaSalle unit. Santander wants ABN’s Italian and Brazilian arms, while Fortis would take the Dutch operations. The prospect of a hostile bid, however, edged closer with the trio noting they had been pushed to bypass ABN’s boards due to “the terms of the contract ABN Amro has signed with Bank of America”, which include a “go-shop” clause, allowing ABN until midnight on May 6 to seek higher bids.
Analysts see the side deal as a “poison pill” measure to frustrate the RBS consortium, which earlier this week claimed the value of its proposal was around 13 per cent higher – at around GBP 49bn – than the Barclays. “This appears to suggest that the consortium would be willing to launch a hostile bid if necessary,” said brokerage Bear Stearns in a note.
Analyst Robert Sage added: “It seems RBS and its partners have no intention of withdrawing from the contest for the time being. We still view the outcome of the situation as finely balanced.”
A RBS spokeswoman said the consortium was working through its options. “We are trying to reach agreement to get access to the books. It’s our preference to find agreement,” she said.
ABN chief executive Rijkman Groenink told Dutch television viewers this week that RBS wanted to “deconstruct the bank, tear it apart, cut it up” – but said “we are receptive to any compelling offer”.
“I hope that another bidder (for LaSalle) comes forward,” he said. “If that’s RBS, who have expressed interest, I’m not stopping them. Let them put their offer on the table.”
But he would prefer his all-share deal with Barclays to go through, arguing that splitting ABN would harm the long-term interests of the bank, its shareholders, and employees.
The consortium statement today said: “The banks continue to believe that their proposals offer materially [more] value for ABN Amro’s shareholders and benefits to customers and employees, compared with the recommended offer from Barclays.”
(c) 2007 Evening News; Edinburgh (UK). Provided by ProQuest Information and Learning. All rights Reserved.