The battle for control of Dutch bank ABN Amro further intensified amid claims and counter-claims by the two major suitors that they represent the best value for the acquisition respectively. Bob Diamond, president of Barclays, has raised the stakes in the acquisition battle challenging claims that Royal Bank of Scotland would be able to extract more value from the Dutch lender’s investment banking operations. Speaking to the Financial Times Diamond argued that the British bank was better qualified than the RBS-led consortium to enhance the value of ABN Amro.
At the same time, in an interesting development Standard Life Investments, which owns 2.9 per cent of RBS and 1.8 per cent of rival ABN bidder Barclays, backed the Royal Bank of Scotland’s attempt to break up the ABN Amro and given a major setback to Barclays’ attempted merger.
Speaking over the affair Bob Diamond has said, ‘To think that any member of the consortium has a better case for unlocking value in the wholesale businesses than the combination of Barclays Capital, Barclays Global Investors and Barclays Wealth really stretches credibility’. Diamond’s assault on the rival bidder RBS led consortium comes as the two firms are locked in a fierce battle to persuade their shareholders of the merits of their rival bids for ABN Amro. Barclays is maintaining that it would be competent to accelerate growth by offering its products to a broader range of customers.
On the other hand, the RBS consortium, which includes Santander of Spain and Fortis, the Belgo-Dutch group, has asserted that its proposed offer is less precarious as it has planned to split the Dutch bank’s operations among three purchasers, and these buyers would be able to merge its part with their existing businesses. In the meantime, SLI has announce its open support for RBS consortium on the ground that its expertise in integrating acquisitions, and because its plan would generate more savings than that of Barclays. 
SLI’s head of UK equities, David Cummings has said while siding with RBS, ‘Overall, I think the Royal Bank is in a better position to complete on the bid. They have got an advantage in terms of integration benefits due to their proven track record with the NatWest deal, which they did some time ago. They have got an ability to attract more synergies from the deal, and therefore can justify paying a higher price than Barclays’.
However, SLI is the latest Barclays shareholder in recent times to assert that Barclays is at disadvantageous position to RBS in the acquisition battle. Recently Atticus Capital, a New York-based hedge fund and activist investor, which owns about 1 percent of Barclays shares, had urged the bank to abandon its bid, contending that it ran the danger of being drawn into a costly bidding battle. It has also argued that deal would weaken the future growth of Barclays Capital and BGI.
Interestingly, reports suggest that almost ten major financial institutions, which between them hold 21 percent shares of RBS and 24 percent of Barclays, had warned Barclays not to increase its bid. However, the most crucial factor in deciding the future of ABN remains the verdict of the Dutch Supreme Court. The court is scheduled to hear an appeal from ABN against the decision of the Dutch Enterprise Court to claim that shareholders are given a vote on a planned $21 billion sale of the US bank La Salle to Bank of America. The Barclays offer is provisional on the sale whereas the Royal Bank’s proposal is conditional on an independent bid for La Salle being accepted.
