Finally, ABN AMRO bows to RBS-led consortium’s competitive bid and decided against recommending RBS and Barclays to shareholders.
Earlier, ABN Amro was formally backing Barclays’ €67.5 billion ($92.07bn) takeover bid, but RBS-led consortium outclassed it with €71 billion, ($96.84bn) offer and forced ABN to change its stance for the suitable seeker.
ABN Amro’s spokesperson said:
Board further engages with both parties with the aim of continuing to ensure a level playing field and minimising any of the uncertainties currently associated with the offers with a view to optimising the attractive alternatives available to shareholders
Although, RBS-led consortium’s proposal is money spinning, yet the board didn’t endorse it as they found that the proposal don’t satisfy its apprehensions over significant unresolved questions, therefore they could not currently recommend either to shareholders.
ABN Amro’s move is a direct blow to Barclays, whose previous support from ABN’s board was seen as a crucial factor in helping it to overcome the higher RBS bid. Dutch bank’s decision also looms over market as while trading in London, Barclays’ shares fell nearly 1%.
To lock the deal, Barclays recently secured backing for its bid from the China Development Bank and Singapore investment firm Temasek, which enabled it to increase the amount of cash for ABN shareholders. Earlier, Barclays had made its bid conditional, but after the board’s decision, it changed its stance, saying their support would merely be needed to complete the deal. After losing the board’s support, Barclays still believes that its offer would prove attractive to ABN shareholders and will endorse it.
Until now, the fate of ABN Amro isn’t clear, but the successful merger will create one of the world’s largest banks.
