Amsterdam: Dutch bank ABN AMRO on Monday (30 July) withdrew its backing of a takeover bid from Barclays and said it was no longer formally recommending offers from the British bank or a Royal Bank of Scotland-led consortium.
The Netherlands’ biggest bank, which faces competing offers of 65.6 billion euros (Rs3,64,845 crore) from Barclays and 71 billion euros from the consortium of RBS, Fortis of Belgium and Spain’s Santander, also reported a 7.1% decline in quarterly net profit.
ABN originally backed Barclays when announcing a deal to merge with it in April.
But it has now effectively withdrawn its recommendation even after Barclays sweetened its offer to buy ABN last week to include more cash.
ABN’s boards -- the supervisory board and managing board -- said they were currently not in a position to recommend the offers from Barclays or the consortium.
“ABN AMRO will further engage with both parties with the aim of continuing to ensure a level playing field and minimising any of the uncertainties currently associated with the offers with a view to optimising the attractive alternatives available to ABN AMRO’s shareholders,” ABN said in a statement.
Barclays’ offer is formally conditional on a recommendation from ABN, but sources have told Reuters that it was unlikely to pull out of the race as a result of the move, and could instead revise that requirement.
ABN’s fate would be decided by shareholders, who would tender their shares to either bidder after formal offers are launched.
The RBS-led offer, which would result in a break-up of ABN, is more than 90% in cash and adds up to 38.1 euros per ABN share at current market prices -- against Barclays’ bid at 34.7 euros per share.
Barclays sweetened its offer with a cash portion, as China Development Bank and Singapore’s Temasek took stakes in the bank, but its offer remains mostly in shares, and therefore vulnerable to recent market turbulence.
ABN reported a net profit of 1.13 billion euros in the second quarter, compared with 1.216 billion euros a year earlier and the 1 billion euros average forecast in a Reuters survey of five analysts. The figures excluded discontinued operations.