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Barclays Speaks with Dutch Regulator on ABN Bid

Barclays Chief Executive John Varley discussed bid procedures for ABN AMRO with the chief Dutch market regulator AFM, the regulator said on Wednesday.

ABN and Barclays entered exclusive merger talks last month after the Dutch bank came under pressure from investors, including British hedge fund TCI, to consider a sale or breakup to boost shareholder returns after several years of underperformance.

"We are the bid authority and we have talked about this issues and other subjects," AFM chairman Arthur Docters van Leeuwen told reporters, adding that he met with Varley on Tuesday.

Varley's visit to the AFM indicates that dicussions with ABN over a potential merger, worth around $177 billion (132.6 bilion euros), were progressing ahead of a April 18 exclusivity deadline.

Separately, Dutch newspaper Financieele Dagblad reported that Goldman Sachs has ended its advisory role with Dutch bank ING Groep to free it up to advise a possible counterbidder for

ABN Amro

ING is ABN's largest shareholder and has said that it wants to take part in consolidation in the European financial sector, but many analysts see an ING counter-bid for ABN AMRO as highly unlikely.

Dealers said the newspaper report prompted speculation Goldman wanted a clear role to advise Royal Bank of Scotland if it makes a counterbid for ABN after Barclays makes a bid.

Goldman and ING declined to comment. The U.S. investment bank is an adviser to RBS and has helped on its past deals.

Barclays and ABN said they were in exclusive talks on March 19.

RBS is one of the most likely banks to launch a rival bid, according to analysts, but it has declined comment on its intentions and is not expected to move until Barclays shows its hand.

Docters van Leeuwen said he and Varley discussed the rules that apply when making a bid for a Dutch company, among other regulatory issues. He added that the AFM would not set conditions for a possible merger, but would look at whether rules are being followed in any merger scenario.

The AFM chief declined to comment when asked whether other banks had approached the AFM.