By Ian Fraser and James Ashton
Published: Daily Mail
Date: 26 April 2007
ROYAL Bank of Scotland has thrown down the gauntlet to Barclays, offering to trump its agreed £45bn takeover of Dutch bank ABN Amro with its own £49bn break-up bid.
Setting the scene for a classic City battle, RBS boss Sir Fred Goodwin, flanked by his Spanish and Belgian partners, said he wanted “to try and find an agreed, constructive way” of snaring ABN without going hostile. But ABN boss Rijkman Groenink told the trio last night if they want the whole company, they must launch two bids, because US unit LaSalle — Goodwin’s prize — is already promised to Bank of America for £10.5bn.
At this stage, Goodwin’s proposal — 70% in cash and 30% in RBS shares — is thin on detail and also includes reversing the LaSalle transaction. Barclays suggests this is impossible. BofA expects its deal to be “fulfilled under its current terms”, and RBS (down 15p at 1998p) insists it will not quit the consortium to pursue LaSalle alone. But Groenink, who faces ABN investors in the Hague today, is under pressure from vocal shareholders to open the books.
Hedge fund TCI, which owns 3% of ABN (up €1.21 at €36.21), welcomed RBS’s “compelling offer”. Peter Paul de Vries, of Dutch shareholder body VEB, said: “Barclays has to come up with substantially more than what it is proposing to win.” Barclays boss John Varley ruled out adding a cash sweetener when questioned on Monday.
Barclays shares rose 1112p at 724p on talk that it could be vulnerable if ABN eludes it.
After an enforced absence from dealmaking, Goodwin said he is “pretty confident” investors are on his side. He added: “We don’t need to do this. We were not in the market for acquisitions but this is a rather unusual situation.” Even though Goodwin famously poached NatWest from under the nose of Bank of Scotland, Ian Gordon at Dresdner Kleinwort says if Goodwin succeeds it “may yet be his finest hour”.
It may also require huge borrowing by partners Fortis and Santander. But Goodwin cannot get everything right. Some 22% of votes cast at the group’s Edinburgh arm protested against a lucrative share option plan.