ABN takeover bid saga continues

Source: Exec Digital UK

Date :21/09/2007 09:45:31

Fortis, the Belgian partner in the Royal Bank of Scotland-led consortium bidding for ABN Amro has launched its €13.4 billion (£9bn) rights issue at a discounted price of €15 a share.

Fortis is part of a consortium, made up of RBS, Belgian-Dutch group Fortis and Spain's Santander.

They plan to sell €13.4 billion ($18.8 billion) of stock to existing shareholders to fund the acquisition.

Takeover bid

ABN Amro has been at the centre of the biggest takeover battle in the banking industry for months.

Besides the consortium, Barclays is also competing to takeover ABN Amro and has already received the approval of the Dutch finance ministry and the European Commission.

However, where the RBS-led consortium is offering around €71 billion largely in cash, Barclays' cash and share bid has fallen in value to around €59 million as banking stocks have fallen in recent months.

While ABN Amro clearly prefers Barclays' bid, which will keep it largely intact, the cash and share offer is now more than 15 percent below the consortium's bid.

ABN Amro chief executive Rijkman Groenink admitted the gap was too great saying that their offer was “too low.”

However, the global banking group emphasised over the weekend that they could not recommend the consortium bid because they plan to break up the bank and split it among the members.

September 21 2007

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