Barclays withdraws ABN Amro offer

Source: Exec Digital USA

Date :05/10/2007 14:41:40

Barclays has dropped its bid for ABN Amro, allowing the consortium led by the Royal Bank of Scotland to buy the Dutch bank.

The bank confirmed it would withdraw its bid after failing to win the backing of shareholders controlling 80 percent of ABN's shares.

Experts believed the 71 billion euro (£49bn; $98.5bn) RBS offer would prevail, since it has a much larger cash element.

The consortium is expected to announce the results of an ABN shareholder vote on its bid on Monday, and to declare its offer unconditional by the end of next week.

“Strong momentum”

The failure to pull off the deal will inevitably raise question marks about Barclays' future.

Despite the setback, Barclays said its business still had "strong momentum".

Barclay’ chief executive John Varley said he was "confident" the bank would continue to enjoy strong growth in the future.

He said that he was requesting payment of the €200m (£135m) break fee, which would "significantly exceed the costs that Barclays incurred in connection with the offer".

The bank also said it would restart its buyback programme, with up to £1.55bn available to purchase a maximum of 196m shares for cancellation.

October 5 2007