ABN Amro Takes Neutral Position Toward Bidders

The supervisory and management boards of ABN Amro met over the weekend to deliberate on two rival takeover bids and are recommending neither. The contenders are Barclays, whose offer was accepted in April, and a three-bank consortium led by the Royal Bank of Scotland that submitted a hostile bid soon thereafter. The Barclays bid, revised last Monday, remains €2 per share lower than that of the consortium's €71.1 billion ($97.2 billion) offer. The consortium's bid also consists of 93% cash, unlike the Barclays bid, which is only 37% cash. The consortium's bid could face regulatory scrutiny, however, and shareholders of one of the partners -- Fortis -- might vote the bid down at their August 6 meeting. (The third party to the consortium, Santander, approved the transaction Friday.) Hedge funds opposed to the consortium's bid are building stakes in Fortis in order to swing the vote, and some are said to have approached Barclays, encouraging it to do the same. Barclays declined. In related news, the China Development Bank and Temasek of Singapore took stakes in Barclays last week and will each have the right to nominate a non-executive director to the Barclays-ABN board if Barclays wins the duel. ABN will report Q2 results on Monday.

Sources: Wall Street Journal, TheStreet.com, Reuters, Financial Times
Commentary: ABN Amro: Subtle Valuations In Takeover Battle • Barclays Raises Bid for ABN Amro • ABN Amro to Meet with Barclays and RBS Consortium
Stocks/ETFs to watch: ABN, RBSPY.PK, BCS, FORSY. Competitors: HBC, DB, UBS. ETFs: EWN, KBE, RKH

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