A consortium led by Royal Bank of Scotland raised the bid for ABN Amro, offered €71.1billion ($95.6billion), topping the Barclays Plc’s an all-share offer of 63.8 billion euros. A group will pay more than €56billion in cash, which is the largest offer yet in the banking industry.
In the record-breaking bank bid, the group will pay €38.40 per share, out of which it will pay €30.40 in cash.
Biggest takeover fight in the bank history begins, when RBS-led consortium gave counter bid on Barclays offer. Barclays made the preliminary offer on April 23, aiming to create a global universal bank as one of the world’s largest financial institutions. But the consortium – which includes Santander of Spain and Fortis, the Belgo-Dutch group thwart its intentions as these three players wants to carve ABN Amro into three.
Although, it seems an overwhelming offer yet the pave of merging the bank is not easy. ABN AMRO has sold its American arm LaSalle bank to the Bank of America for $21 billion amid the ongoing battle of takeover. RBS-led group drag the deal into the court and the Dutch Supreme Court stipulate the deal. Whereas the Bank of America also threaten Dutch bank to pay compensation if previous deal failed.
Banks are trying to resolve the dispute with Bank of America about the ownership of LaSalle through negotiation. RBS and BoA held discussions last week about carving up LaSalle, but unfortunately could not resolve the matter. If the negotiations fail than the court will decide whether LaSalle will go with a BoA or with RBS.
The consortium revealed the split of the financing of the deal - 38% will come from RBS; 34% from Fortis and 28% from Santander.
Right from the beginning, ABN AMRO seems not to support the group’s offer that’s why it decide to agree ABN’s management initially, but if it will not work group would be prepared to make the offer directly to shareholders.
RBS chief executive Fred Goodwin said he expected the offer to be put alongside Barclays’ offer in any shareholder vote.
All of the bids should go before shareholders, and they should allow shareholders to decide in an environment of having as level a playing field as can be
As the announcement spread in the market, ABN Amro shares fell 80 cents to €35.81 as investors absorbed the consortium’s decision to hold back €1 per share whereas RBS shares also fell and trades at 8p lower.
Image: edinphoto
Via: BBC
