Royal Bank consortium likely to buy ABN, says ABN CEO

17 September 2007

Mumbai: A consortium led by Royal Bank of Scotland is most likely to acquire Dutch bank ABN AMRO as Barclays'' rival offer has little chance of matching the consortium''s bid financially, ABN''s chief executive told Dutch TV.

A consortium of RBS, Belgian-Dutch financial group Fortis and Spain''s Santander has offered a cash bid worth about €70.2 billion ($97.4 billion), against Barclays'' part cash, part share offer worth about €58.5 billion.

"The possibility is fairly small that Barclays shares will rise so that its bid for ABN AMRO will top the consortium''s bid," ABN''s CEO Rijkman Groenink told Dutch news programme NOS Journaal.

Barclays'' offer is currently 58 per cent in shares, and the value of its offer has fallen by €6.5 billion in two months. Its shares dropped about 18 per cent since mid-July amidst worries over sub prime mortgage market.

The RBS consortium, however, is yet to raise part of the funds. Most importantly, the credit squeeze has raised borrowing costs for a €13-billion rights issue by Fortis.

ABN has taken a neutral stance on the two competing bids saying in a statement that a takeover by Barclays fits ABN''s strategy of keeping the Dutch bank in one piece but that the RBS-led consortium''s bid was financially superior.