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Barclays Formally Launches $89 Billion ABN Takeover Offer


Barclays formally launched its 65 billion euro (US$89 billion) bid for ABN AMRO on Monday as it attempts to beat a Royal Bank of Scotland-led consortium in the biggest ever bank takeover.

Barclays confirmed in a statement its offer, which entitles ABN shareholders to receive 13.15 euros in cash and 2.13 new Barclays shares for each ABN share tendered.

The offer period will run from Aug. 7 until Oct. 4, Barclays said in an offer memorandum published in Dutch newspapers on Monday.

At current share prices and foreign exchange rates, the Barclays offer is worth about 34.54 euros per share of ABN.

Barclays's offer will compete against a planned 71 billion euros offer by a consortium of Royal Bank of Scotland, Belgian-Dutch Fortis and Spain's Santander, which will be about 93% in cash.

Barclays' formal bid comes a few hours before Fortis shareholders vote on whether Fortis can go forward to buy ABN and issue 13 billion euros in shares to fund its part of the deal.

Fortis Shareholders To Vote On ABN Bid

The Fortis shareholder meeting is the latest hurdle for the consortium, albeit one Fortis is expected to clear.

Fortis shares have fallen almost 18% since it announced its involvement and a plan to finance its 24 billion euro share of the deal with Europe's second largest ever rights issue.

Fortis wants shareholders at meetings in Belgium and the Netherlands to back its vision of becoming the biggest bank in the Benelux and support the 13 billion euros ($17.82 billion) rights issue it needs to achieve its goal.

Fortis needs the backing of 50% of the shares represented at the meetings for its proposed purchase of ABN and 75% support for its planned rights issue. The Belgian-Dutch company needs these levels of backing both at its morning meeting in Brussels and at an afternoon session in Dutch city Utrecht.

Its consortium partners and rival bidder Barclays will be keenly watching the results. If any of the four votes go against Fortis, it could improve the chances of rival bidder Barclays, which has put forward a largely share offer worth about 65 billion euros.

However, Fortis could still consider other options, from calling another shareholder meeting if the voting is tight to a slimmed-down bid for fewer ABN assets.

Barclays has said it would keep ABN AMRO largely intact and make Amsterdam the combined group's headquarters. ABN backed Barclays' original offer in April, but withdrew its formal recommendation last week.

RBS shareholders will vote on Friday and are widely expected to support the group's plan. ABN shareholders will be left until early October to decide which offer to accept.

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