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ABN Amro shares on the rise following higher bid

AMSTERDAM - ABN Amro shares rose by 3.8 per cent on Monday following the revised takeover bid announced by banking consortium Fortis NV, Royal Bank of Scotland (RBS) and Santander.

Earlier on Monday the three banks announced they were prepared to pay 71.1 billion euros (98.03 billion dollars) for the Dutch bank excluding its US subsidiary LaSalle.

‘Taking over ABN Amro bank was an interesting opportunity last week, and it still is today,’ said board president Fred Goodwin (RBS) on Monday.

The consortium’s bid is 13.7 per cent higher than that of British bank Barclays. Financial analysts of Rabo Securities said on Monday the existing Barclays offer ‘is no longer a serious alternative.’

ABN Amro refrained from commenting on the new offer, but Barclays responded it would not persist in its efforts to take over ABN Amro at any cost.

‘We will only continue our efforts to take over the bank if it gives appealing results for our shareholders,’ board president John Varley told reporters.

The consortium’s offer implies the consortium values ABN Amro at 38.40 euros per share, equalling its previous bid for the bank including LaSalle.

The three banks also decided to raise the share of cash in the bid to 93 per cent, substantially higher than the 79 per cent cash payment in their previous proposal.

The share of each bank in the overall bid remains unchanged. RBS will pay 27.2 billion euros, Fortis NV will pay 24 billion euros while Santander pays 19.9 billion euros.

The consortium said the bid is only relevant provided ABN Amro ‘did not agree to takeovers or sales that would impact a substantial part of its activities or liquidities.’

Last Friday the Dutch Supreme Court ruled ABN Amro was permitted to sell its US subdivision LaSalle without prior consultation of the shareholders.

Following the decision, the consortium announced it would make a ‘superior bid’ to that of Barclays with whom it is competing to take over the biggest bank of the Netherlands.

The British Sunday Times had quoted anonymous sources saying Barclays was postponing making a possible revised bid on ABN Amro in order to raise pressure on the competing consortium.

Dutch financial markets watchdog AFM gave Barclays and the banking consortium until July 23 to make a bid.