ABN opts for neutrality between Barclays, Royal Bank of Scotland bids

30 July 2007

After originally backing Barclays'' €67.5-billion takeover offer when announcing their merger deal in April, Dutch bank ABN AMRO has withdrawn its recommendation to shareholders to approve the Barclays'' offer, maintaining neutrality on the competing offers from the British bank and the higher bid made by Royal Bank of Scotland-led consortium.

The Netherlands'' biggest bank said it would recommend neither the Barclays bid nor a rival €71-billion offer from a group led by the Royal Bank of Scotland to investors, in order to ensure "a level playing field" between the bidders.

In a statement, ABN''s supervisory board and the managing board said they were currently not in a position to recommend the offers from Barclays or the consortium said it was not "currently" able to recommend either of the bids but would 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 to optimise the attractive alternatives available to shareholders.

The move is seen as a blow to Barclays whose previous support from ABN''s board was seen as a crucial factor in helping it to overcome the higher RBS bid.

Barclays had earlier made its bid conditional on gaining the support of ABN''s board but now says support would merely be needed to complete the deal.

The RBS group recently sweetened its offer for ABN as the two groups vied to win control of the bank. (See: RBS consortium trumps Barclays'' bid for ABN Amro with $98 billion offer)