Barclays Raises Bid for ABN Amro

Barclays has raised its offer for Dutch banking giant ABN Amro to €67.5 billion ($93 billion) from €65 billion and included a cash element following comments by ABN CEO Rijkman Groenink that ABN's shareholders require a richer bid. The new bid consists of €42.7 billion in stock and €24.8 billion in cash. The revised offer remains shy of the €71 billion ($98.2 billion) hostile bid submitted by a Royal Bank of Scotland-led consortium. Mr. Groenink said over the weekend that though he believes a Barclays combination is better for ABN "in terms of content," the amount is not sufficient to satisfy a significant proportion of ABN's shareholders. "There is a large group of hedge funds and speculators," he told Dutch newspaper NRC Handelsblad, that have "but one interest and that's in the highest offer, in cash, and today, please. Estimates are that they own 30-40% of the bank." ABN is asking the RBS consortium for specifics on its plans to break up the bank in case its offer is accepted. ABN's European Staff Council said it has received assurances from the consortium concerning the "social consequences" of the takeover that exceeded its expectations. On August 6, shareholders of consortium member Fortis will vote on the consortium's bid and on Fortis's plans to help finance it.

Sources: Reuters I, II, III, IV, Wall Street Journal, Forbes, MoneyCentral
Commentary: ABN Amro to Meet with Barclays and RBS Consortium -- FT • Barclays to Sweeten Offer for ABN Amro -- FT • RBS Consortium Ups Cash Ante for ABN Amro
Stocks/ETFs to watch: ABN Amro Holding N.V. (ABN), Barclays PLC (BCS), Royal Bank of Scotland Group plc [ADR] (RBSPY.PK), Fortis NV [ADR] (FORSY). Competitors: HSBC Holdings plc ADR (HBC), Deutsche Bank AG (DB), UBS AG (UBS). ETFs: iShares MSCI Netherlands Index (EWN), streetTRACKS KBW Bank (KBE), HOLDRS Regional Bank (RKH)

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.