Barclays bid for ABN Amro is rejected

The Dutch bank, ABN Amro, has rejected Barclays bid, it has also turned down a higher rival bid by a consortium led by RBS (RBS).

The Barclays bid, which is mostly in shares was worth €63.9 billion last Friday and the Dutch bank had previously been in favour of this offer. The RBS offer was worth €70.5 billion and if either one is successful in making the acquisition, it will be the largest takeover ever in the financial sector.

Barclays has negotiated a strategic alliance with China Development Bank strengthening its position and this could provide opportunities for a united Barclays/ABN Amro group.

In relation to the rejection of the RBS offer, a statement from ABN Amro referred to unanswered questions around the consortium’s plans to breakup the ABN group. Under these plans, Fortis NV of Belgium would take ABN’s Dutch operations, Banco Santander of Spain would take its Brazilian and Italian businesses, and RBS would keep the rest, including ABN’s investment banking division.

The fight for the takeover of ABN started in March and has involved an uprising by ABN shareholders and rulings by the Dutch Supreme Court.

Barclays remains confident that ABN’s board will ultimately support its takeover bid and banking sources expect Barclays to wait for an advance in its share price and then search for renewed backing from ABN’s board.

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