Deals and IPOs

ABN AMRO Investors Accept RBS-led Bid: FT


Investors representing 85% of shares in ABN AMRO have accepted a 70-billion-euro ($99 billion) bid for the Dutch bank from a consortium led by Royal Bank of Scotland, the Financial Times said.

The newspaper, without naming sources, said on Saturday the level of acceptances meant the consortium, which also includes Spain's Santander and Belgian-Dutch group Fortis, could declare its offer unconditional this week.

Royal Bank of Scotland declined to comment.

Britain's Barclays on Friday conceded defeat in the 7-month battle for ABN AMRO and the rival trio led by Royal Bank of Scotland moved in to clinch the world's biggest bank takeover.

The outcome of the fight for the Netherlands' biggest bank was widely expected, after a fall in the Barclays share price saw its bid slip behind the 71 billion euro ($100 billion) mostly cash offer from the RBS consortium.

In a statement, Barclays said it had received only 0.2% of ABN shares by the time its offer closed on Thursday.

Barclays was originally the preferred suitor as it planned to keep the business whole, but ABN switched to a neutral stance after the gap between the two bids widened.

Barclays will receive a 200 million-euro "break fee" from ABN, which the bank said significantly exceeds the cost of the bid.

Keen to close the door on the saga and refocus on organic growth, Barclays said it was confident in its momentum and would restart a buyback programme worth up to 1.55 billion pounds ($3.16 billion).

Analysts had speculated failure would make Barclays itself a takeover target, but that talk has faded with the recent logjam in loan markets.

The offer from RBS and its partners -- Dutch-Belgian Fortis and Spain's Banco Santander -- expires at 1300 GMT.

The result will not be immediate, however, as shares are due to be counted over the weekend. The group has until next Wednesday to detail the result of the tender, and until the end of the week to declare the offer unconditional.

Divide and Conquer

Attention will then turn to the consortium's mammoth task of breaking up ABN, which has more than 4,500 branches across 53 countries, integrating its businesses and delivering cost savings to prove it has not overpaid.

The deal is seen by many as an example of the excesses of the M&A boom, when bankers were confident they could carry off increasingly complex deals, and progress is likely to be viewed as test case for international banking takeovers.

RBS, an acquisitive bank that beat integration targets with its 21 billion pound purchase of larger rival NatWest in 2000, faces the biggest task swallowing ABN.

It is taking ABN's wholesale and investment banking unit and its Asian businesses and aiming for just over 2 billion euros of cost savings.

Santander gets ABN's Italian and Brazilian operations, while Fortis will get its Dutch business, as well as its wealth and asset management operations.

RBS will pay almost 16 billion euros for its ABN businesses, including 4.5 billion in shares and the rest from funds already raised. Fortis and Santander will fund their portions -- 24 billion and 19.5 billion, respectively -- from rights issues and with cash raised from disposals or in capital markets.

The consortium has already made some savings on the cost of the deal by buying up 8% of ABN in the market at prices below the offer price.

The deal marks another victory for activist shareholders, who called for ABN to be put up for sale in late February after years of underperformance and will benefit from an approximate 50% rise in its share price since then.

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