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RBS woos ABN with £49bn bid plan RBS woos ABN with £49bn bid plan
(about 1 hour later)
A group of banks led by Royal Bank of Scotland (RBS) has said it is interested in buying Dutch bank ABN Amro in a deal worth some £49bn.A group of banks led by Royal Bank of Scotland (RBS) has said it is interested in buying Dutch bank ABN Amro in a deal worth some £49bn.
The proposed offer would trump a deal that was agreed with the UK's Barclays.The proposed offer would trump a deal that was agreed with the UK's Barclays.
Barclays planned to merge with ABN in a move that would create one of the world's biggest banks, valued at £94bn.Barclays planned to merge with ABN in a move that would create one of the world's biggest banks, valued at £94bn.
RBS and its allies, which are Spain's Santander and Belgium's Fortis, are proposing a deal worth 72bn euros (£49bn; $98bn), or 39 euros a share.RBS and its allies, which are Spain's Santander and Belgium's Fortis, are proposing a deal worth 72bn euros (£49bn; $98bn), or 39 euros a share.
ABN's shares climbed 4% to 36.41 euros in Amsterdam.
In London, RBS saw its stock dip 1.4% to 1,984 pence, while Barclays gained 2.7% to 732p.
Hostile forceHostile force
The deal, should it be made formal, would be financed by 70% cash and 30% of RBS shares.The deal, should it be made formal, would be financed by 70% cash and 30% of RBS shares.
RBS said it was worth about 13% more than the offer put forward by Barclays.RBS said it was worth about 13% more than the offer put forward by Barclays.
Some analysts have questioned whether Barclays would be able to table a higher offer.
The general synergies seem to favour the consortium bid, even after Barclays' head start Richard Hunter, Hargreaves Lansdown Read Robert Peston's blog
"The battle over ABN broke out in earnest this morning," said the BBC's business editor Robert Peston."The battle over ABN broke out in earnest this morning," said the BBC's business editor Robert Peston.
According to the RBS group, a formal bid would only happen if ABN Amro halted its plans to sell its US operations, LaSalle, to Bank of America. According to the RBS group, a formal bid would only happen if ABN Amro halted plans to sell its US operations, LaSalle, to Bank of America.
The sale of LaSalle was a key part of the deal that Barclays had secured, and had angered many shareholders. The sale of LaSalle was a key part of the merger deal that Barclays secured, and had angered many shareholders who saw the $21bn ( £10.5bn) sale as a poison pill that was put in place to put off rival bidders.
According to the BBC's business editor, ABN will not want to halt the sale of LaSalle, and will view RBS as "a hostile invading force rather than an institution trying to offer more money to its owners than Barclays".According to the BBC's business editor, ABN will not want to halt the sale of LaSalle, and will view RBS as "a hostile invading force rather than an institution trying to offer more money to its owners than Barclays".
ABN's shares climbed 4% to 36.41 euros in Amsterdam. Support
In London, RBS saw its stock dip 1.4% to 1,984 pence, while Barclays gained 2.7% to 732p. UK hedge fund TCI, which has been critic of ABN's performance and strategy, was quick to give its backing to the RBS-led group.
"The board of ABN must allow the RBS consortium full access to conduct due diligence immediately," TCI said. "The board must recommend the RBS consortium offer, subject to the diligence condition being met."
Analysts are keenly awaiting the next move from ABN and Barclays
RBS and its supporters claim that their deal would entail fewer risks and could offer a better fit with ABN's existing operations.
"The banks believe that the potential transaction will create stronger businesses with enhanced market positions and growth prospects in each of ABN's main markets," it said.
Should the group table a successful bid, then its is expected to break up ABN, with RBS taking LaSalle, Santander getting Italian and Brazilian operations, and Fortis running ABN's Dutch and Belgian retail business.
"The gloves are now off and ABN finds itself in a difficult situation," said Richard Hunter of Hargreaves Lansdown. "The significantly higher consortium offer cannot be ignored."
"The general synergies seem to favour the consortium bid, even after Barclays' head start on proceedings," he added. "Matters are now delicately poised and ABN's next move is keenly awaited."