Royal Bank, Santander Central Hispano SA and Fortis indicated two days ago they will offer 72.2 billion euros($98.2 billion) for ABN Amro, trumping an all-share accord with Barclays, valued at about 64 billion euros through yesterday. They asked ABN Amro to drop a so-called standstill agreement that would prevent them from making an offer for 12 months without the Dutch banks consent.
They are ratcheting up the pressure on the ABN Amro board, said Robert Talbut, chief investment officer of Royal London Asset management who helps manage about 31 billion pounds ($62 billion), including ABN Amro, Royal Bank and Barclays stock. It shows the group is serious about putting forward its proposals and they want co-operation from the ABN board.
The Royal Bank-led group said on Friday that it intends to make an offer, adding that its statement was prompted by ABN Amros decision to sell Chicago-based LaSalle Bank to Bank of America Corp for $21 billion. The group has said its bid is dependent on a reversal of the sale of its US unit.
ABN Amro shares rose 0.9% on Friday in Amsterdam to 36.64 euros as of 1:35 pm, valuing it at 70 billion euros. The stock has surged 34% since it announced talks on March 19. Barclays shares rose 1.8% to 731.5 pence in London and those of Edinburgh-based Royal Bank slipped 1.1% to 1,949 pence.
ABN Amro, based in Amsterdam, said on Thursday that its soliciting alternative bids for LaSalle. Chief executive officer Rijkman Groenink and ABN Amros board have favored Barclays because the third-biggest UK bank plans to keep the company mostly intact. The Royal Bank-led group intends to break up the 183-year-old Dutch bank if its bid succeeds.
The banks notified the supervisory and managing boards of ABN Amro on Thursday evening of their intention to make a public offer for 100% of the issued and outstanding share capital of ABN Amro on a fully diluted basis, the group said on Friday.
Their proposals offer materially higher value for ABN Amros shareholders and benefits to customers and employees compared with the recommended offer from Barclays.