U.S. News

ABN to Discuss Rival Bid Proposal with Barclays


ABN Amro said on Wednesday it would hold discussions with Barclays on a new bid proposal unveiled this week by the consortium that is seeking to dislodge Barclays as ABN's preferred merger partner.

ABN Amro said it had received the proposal from the consortium of Royal Bank of Scotland, Santander and Fortis and would discuss it with representatives of the consortium and also discuss its implications with Barclays .

The RBS-led group sweetened its 71.1 billion euros ($98 billion) bid for ABN on Monday, offering 93% cash instead of the previous 79%.

Barclays, which has the backing of ABN's management, is offering shares worth 65 billion euros to acquire ABN Amro, which has been at the centre of an intense takeover battle for the past five months.

"Under the terms of the Merger Protocol dated 23 April 2007, ABN Amro will also discuss with Barclays their offer and the implications of the Consortium's revised proposed offer," ABN said in a statement.

That could indicate that Barclays will come under pressure to sweeten its offer, a scenario that Barclays Chief Executive John Varley said was possible in interviews with several European newspapers. However, Varley added he had no plans to take on partners to bid for ABN.

Barclays and the consortium have until July 23 to launch their proposed offers.

After a court unfroze the stalled sale of ABN's U.S. unit LaSalle Bank to Bank of America last week, the RBS-led consortium revised its offer to include more cash and gave up on including LaSalle in the deal.

The consortium's latest offer is conditional on ABN retaining its remaining major assets, which span from Asia to South America, and ABN said in Wednesday's statement that it would keep the bank intact ahead of a merger.

"ABN AMRO also confirms that it has no intention of making any major asset disposals at the current time," it said.