Bidding war for ABN Amro is not ending even after posting a higher bid. Mishmash, in and outside the Dutch bank, is adding worries to RBS-led consortium and Barclays.
RBS-led consortiums’ vow to acquire ABN Amro will shape today as Fortis shareholders will vote on $96.8bn Dutch bank bidding, and on the other side, Barclays has formally launched its $89 billion or 13.15 euros in cash and 2.13 new Barclays’ shares for each ABN share bid for it.
For RBS-led consortium, the Fortis vote is a pivotal factor, as they will accumulate $17.8 billion for funding the deal. If RBS-led consortium succeeds in acquiring ABN Amro, the Belgian-Dutch Fortis would obtain the bulk of ABN Amro’s Dutch operations, and its wealthy private clients and asset management businesses worldwide. With Amro’s asserts, Fortis’s will add additional 4.3 % earnings per share by 2010, but board rule out any profit in short period.
Fortis has dual-headquarters structure, therefore the vote will take place twice - first in Brussels in the morning and then in Utrecht, Netherlands, in the afternoon. Shareholders can vote in both, either, or neither, but both meetings must approve the share issue for it to go through.
If shareholders approve the takeover and the share issue, analysts believe the consortium will almost certainly win ABN, but it could be a very close call.
After valuing the Fortis’ worth, Barclays presents anew proposal, which is worth about 34.54 euros per share of ABN, at the current share prices and foreign exchange rates. Barclays’ offer memorandum will run from August 7 until October 4 and asserts that its deal is still attractive because it will provide greater growth in the long run, despite the lower value.
Bid war has become acrimonious for claimers as they are using all possible, fair and unfair means to acquire Dutch bank. Although, ABN Amro has pulled its support from Barclays, yet it could not part itself away from it as Amro’s chief executive Rijkman Groenink has urged Fortis shareholders to vote against the RBS-led consortium’s takeover, alleging that shareholders will lose at least 25% face value of its shares. RBS countered the comment by alleging it as a “bizarre” coming after ABN’s withdrawal of its recommendation for the lower Barclays takeover offer.
After pulling its support from Barclays, ABN Amro has said it will advise its shareholders as to which suitor it prefers at a meeting to be scheduled by Sept. 27.
