British bank Barclays' bid for ABN Amro, one of two offers for the Netherlands' biggest bank, is too low to recommend to shareholders, ABN's chief executive said on Thursday.
Barclays' part-cash, part-share bid is currently worth about 59 billion euros ($82.52 billion), while a rival, mostly cash bid from a consortium grouping Royal Bank of Scotland, Belgian-Dutch financial group Fortis and Spain's Santander is worth about 70 billion euros.
Either would be the world's biggest bank takeover.
"The offer of Barclays is too low. We cannot ask shareholders to pay the difference from the consortium's bid," Rijkman Groenink told an extraordinary meeting of shareholders called to discuss the offers.
He also stopped short of backing the consortium's offer. "That offer is an offer to break up the bank. We do not wish to support an offer that will break the bank up," he said.
ABN Amro initially favoured Barclays, but now officially has a neutral stance on the rival offers.
Barclays Should Raise Offer
Groenink said ABN could change that stance if Barclays were to close the gap, but he said this appeared difficult, given the difference between the two figures.
Barclays, Britain's third-biggest bank by market capitalisation, declined to comment.
Groenink said in a television interview on Sunday that he believed the consortium led by RBS, the UK's second-biggest bank, was likely to win the battle.
The ABN Amro chief told shareholders on Thursday he did not believe either bid would be withdrawn, despite recent market turmoil. Fortis, for example, is about to launch a 13 billion euros rights issue.
Groenink added he did not see any grounds for the consortium to invoke a clause allowing it to revoke its offer in the event of a material adverse change.
"Formally the possibility exists ... But all financial specialists and the consortium have told us they are not worried about this," Groenink said.
At Thursday's meeting about 600 shareholders were present, representing 4.6% of ABN AMRO's outstanding shares.
The meeting is designed to provide shareholders with information regarding the two offers, but will not decide the outcome.
Shareholders have until early October to tender their shares either to Barclays or to the consortium.
ABN shares were down 0.4% at 36.53 euros, valuing it at about 69 billion euros, while the Dutch blue-chip AEX index was down 0.6%, and the DJ Stoxx European banks index was 1.7% lower on concerns over the credit market squeeze.