RBS bites back
The battle over broke out in earnest this morning. has just announced that it and its partners – of Spain and of Belgium – believe they could pay around 13 per cent more for ABN than what is offering.
What will also attract some ABN shareholders is that this banking troika would offer 70 per cent in cash and 30 per cent in RBS shares.
However they have made any formal offer conditional on ABN reversing its decision to sell its US bank, , to . ABN – which is pleased as punch at having made that sale – will not want to do that.
Now if ABN were a normal British company, RBS would now have a distinct advantage over Barclays, because in most bid contests money talks, especially cash money.
But ABN isn’t a normal British company. First, it’s a bank: banking regulators have the power to make or break takeover offers, and the Dutch regulator has already signalled he’s uncomfortable about dismantling ABN. Second, it’s not British (yes, I noticed): Dutch politicians may also intervene to hinder a break-up of ABN.
So this contest is a test of shareholder power within the European Union. If the owners of ABN are the dominant force, RBS would be given the opportunity by ABN to make its offer work. If they’re not, ABN will enter any cursory talks with RBS in a hostile frame of mind and then proceed to squish its proposal.
What’s my prediction? ABN’s board will view RBS as a hostile invading force rather than an institution trying to offer more money to its owners than Barclays – and it will do its darnedest to repel it. Not exactly cricket.
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How the other half live eh..
RBS and Co to cough up £49 billion for another bank... Investment by financial instutions in Scottish start-ups in 2006 about £6m..
Priorities, priorities..
RBS launching a massive counter strike! well the 70% cash offer will be hard to ignore. However ABN is a Dutch company with a lot of Dutch share holders so lets what happens. I don't think barclays will up their offer but you never know.
Given that RBS wants to chop ABN to bits whereas Barclays wants to "merge" with it, from the point of view of the employees of ABN (including the directors) the Barclays bid is preferable.
Barclays have threatened to cut jobs in the UK if the "merge" takes place wheras RBS will continue their success' once again as they did when they took over NatWest. I think RBS are making a better move than Barclays.
I think RBS are making a good move but it all depends on how easily Bank of America will give up LaSalle. Why would they want to allow a rival company, who is looking to make inroads into America, gain a valuable foothold? Even if ABN agree to RBS's offer, the battle will then begin for LaSalle and that will be the important one.
For the banking industry consolidation is long due and unfortunately considering fiercely competitive market, these takeovers are going to be highly volatile with subsequent job losses, remote ownerships and less user friendly products.
I work for Barclays at the moment. Not happy with the budget I've been given to spend on IT, guess who's interviewing me next week. Yes - RBS. Where are they getting all this money from??
of course ABN management wants the Barclays merger - they made a really sweet deal for themselves. The Dutch employees are surely rooting for Barclays, but US / LaSalle employees are rooting for RBS.
From a workforce perspective, the extra 4bn that RBS may offer is going to have to come from even more cutbacks. Synergy gains are easiest to realise from efficiency, not product innovation or abnormal increase in market share. Institutional shareholders are of course going to chase short term returns, as that is their only goal.
I don't believe the ABN board are suffering from management hubris, otherwise they'd accept the RBS offer, and sail into the sunset on a (larger) yacht.
In this case, the client-agency conflict is a good thing, for the future existence of an old company, rather than a fire sale at the hands of a consortium.
Here at LaSalle, we're rooting for RBS. If Groenink were ever to show his face in Chicago again he'd likely be assaulted given the implications of a sale to BofA. The impact on the employees of LaSalle is rarely mentioned but then they're American, so who really cares, huh ...personally I blame George Bush.
The RBS deal is still going to create a lot of debt, even after the rights issue. This will come back and haunt employees and shareholders alike.
I think RBS and its partners are just making a hasty decision not looking into the amount of money they're gonna spend. They just focused on grabbing Abn no matter what. And thats not an indication of a healthy takeover because debts will be very high after that. I think Abn and Barclays will make a really good pair. If Abn knew they were going with barclays then they shouldn't have opened doors for other bidders. Here is where the main problem started. Abn should not step back now and it should go with Barclays.
That what NATWEST said about RBS and look what happened? Share prices went up and up!!!