RBS Consortium Launches $95.7 Billion Bid for ABN Amro
A consortium led by Royal Bank of Scotland launched a 71.1 billion euro ($95.7 billion) bid for Dutch group ABN AMRO , trumping Britain's Barclays in a battle for the world's biggest bank takeover.
In a long-awaited move, the consortium of RBS, Fortis and Santander said on Tuesday it had raised the cash element of its offer from an original proposal but that the bid was conditional on being able to undo ABN's sale of its U.S. bank arm.
The offer was pitched at 38.40 euros per ABN share -- 30.40 euros in cash plus 0.844 new shares in RBS.
"It's superior for the oldest reason in the book: it gives more money to the shareholders," Fred Goodwin, RBS's chief executive, said in an interview with CNBC's Maria Bartiromo. "It is conspicuously more valuable than the Barclays deal."
The Barclays agreed offer of 3.225 Barclays shares for every ABN share is currently valued at 64 billion euros or around 34.45 euros a share, based on Barclays share price of 726 pence on Tuesday.
"This (RBS) deal offers better value for ABN shareholders, and we anticipate the consortium winning control," said Alex Potter, an analyst at Collins Stewart in London.
The consortium said it would prefer to agree on a deal with ABN's management but indicated it would go direct to shareholders if necessary. It said it expected its offer to be put alongside the Barclays offer in any takeover vote put to ABN's investors.
Goodwin said the backing of about 70% of ABN's shareholders last month to sell or merge parts of its business indicated support for the consortium's proposal. "I don't think they could have been much clearer," he said.
The consortium predicted cost savings of 4.23 billion euros if deal goes through.
"It (would propel) us to the third position of private banks in Europe … and (we would be) in the top league of asset managers thanks to this deal," Jean-Paul Votron, CEO and board member of Fortis told CNBC Europe.
ABN Amro agreed in April to be bought out by Britain's Barclays in an all-stock deal worth 63 billion euros ($84.7 billion).
The consortium said the offer is fully financed, but hinges on how ABN Amro shareholders vote on the sale of its U.S. unit LaSalle.
As part of the Barclays deal, ABN agreed to sell LaSalle to Bank of America for $21 billion. But a Dutch court ruled that the sale needed shareholder approval. Further complicating matters, Bank of America has threatened to sue for hundreds of millions of dollars if the LaSalle deal does not materialize.
Barclay's CEO said there is "nothing surprising" in the RBS-led group's offer for ABN Amro, according to Reuters.
RBS, which is keen to acquire LaSalle to boost its presence in the United States, offered $24.5 billion for LaSalle earlier this month, but that offer was rejected by ABN.
ABN told CNBC Europe it is studying the offer.
Votron declined to comment at the current time when asked about the possibility of Fortis bidding for ABN separately in the event of LaSalle being stripped from the deal.