ROUNDUP ABN Amro shares surge as RBoS consortium makes higher indicative offer

ROUNDUP ABN Amro shares surge as RBoS consortium makes higher indicative offer

	Published : Wed, 25 Apr 2007 12:37 By : Agencies Print this Story

LONDON (Thomson Financial) - Shares in ABN Amro Holding NV surged this morning after the Royal Bank of Scotland Group PLC consortium said they have made an indicative offer for the Dutch bank at 39 eur per share, some 13 pct higher than the value of the Barclays PLC offer as of the market close yesterday.

The higher bid also sparked speculation that Barclays will not come back with a second offer, raising the chance it too could become a takeover target.

The RBoS consortium said this morning its offer for ABN Amro would comprise 70 pct cash and 30 pct in RBoS shares and that it believes the execution risk would be lower than in a transaction with Barclays.

The consortium -- which also includes Fortis NV and Banco Santander Central Hispano SA -- said making firm its offer for ABN Amro depends on it gaining limited due diligence, and ABN Amro taking steps to ensure that LaSalle Bank remains within the ABN Amro group.

But after the consortium's offer for ABN Amro was made public, ABN Amro said if Bank of America matches any superior offer made for LaSalle, it will win the deal as no further termination of the contract will be possible.

The Dutch bank's statement came amid pressure for it to reveal the termination circumstances of the LaSalle deal after it said on Monday the US unit will be sold for 21 bln usd to BoA.

That deal was separate to the merger agreement between Barclays and ABN Amro, valued at 36.25 eur per ABN Amro share.

ABN Amro activist shareholder the Children's Investment Fund welcomed the consortium's 'compelling offer' and called on the ABN Amro board to allow the RBoS consortium full access to conduct due diligence immediately.

It added that ABN must also are commend the RBoS consortium offer, subject to the diligence condition being met, and terminate the LaSalle Bank sale'.

The Dutch shareholders association VEB has threatened ABN Amro with legal action if it does not place the sale of LaSalle up for approval by shareholders.

RBoS cancelled a meeting with ABN Amro on Monday after ABN said it was proposing to sell LaSalle Bank, but the consortium said today it has accepted a new invitation to meet with ABN Amro.

The RBoS consortium also said because of its higher bid, it is in ABN Amro's stakeholders' interests for the supervisory and management boards to co-operate with the consortium to develop its proposals into a formal offer.

The pre-conditions of its offer also include limited due diligence on no more information than received by Barclays and Bank of America.

RBoS will lead the consortium's reorganisation of ABN Amro and take primary responsibility of ensuring that the Dutch bank meets its regulatory requirements.

ABN Amro's shares surged 4.63 pct to 36.60 eur, while Barclays gained 2.04 pct at 727 pence as dealers speculated it will miss out and become a target itself.

Collins Stewart said Barclays could possibly bid higher than 39 eur to compensate for the lack of cash in the RBoS bid, but said it would be massively value-destructive for Barclays to bid at the necessary 42-43 eur per share level and that this was therefore unlikely to happen.

Theodoor Gilissen agreed that Barclays is unlikely to place a counter bid and added that if Barclays does fail in its attempt to snag the Dutch bank, it will itself become a takeover target.

Bank Degroof analyst Ivan Lathouders said the 1.94 pct decline to 33.80 eur in Fortis' shares in Brussels is not a justified reaction, adding that the consortium's bid at 39 eur is 'not dilutive for the shareholders'.

RBoS shares also edged lower, down 33 pence at 1,980.

In Spain, where SCH shed 0.22 pct to 13.32 eur, analysts warned about 'short-term value destruction' for SCH shares and the increased likelihood of a capital hike.

Separately, but staying in Spain, Banco Bilbao Vizcaya Argentaria SA chief executive Jose Ignazio Goirigolzarri said the bank has no plans for growth through acquisitions, scotching rumours of an imminent bid for ABN Amro.

Both Barclays and ABN Amro have refused to comment on the RBoS consortium's offer.

aaron.gray-block@thomson.com

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