As all bankers’ eyes stay on ABN Amro’s share price on Monday, the Dutch bank plans to disclose the financial information it made available on an exclusive basis to Barclays to a rival consortium, reports the Wall Street Journal. ABN is pursuing a pre-emptive strategy to show it is open to having a level playing field for the consortium while continuing its talks with Barclays, says the Journal, citing people familiar with the situation.
The move comes amid mounting speculation following confirmation on Friday that Royal Bank of Scotland, Spain’s Santander and Dutch-Belgian Fortis are seeking talks with ABN. Any offer for ABN could top $80bn in what would be the biggest banking deal ever.
ABN chief executive Rijkman Groenink is expected to agree to meet with the consortium, after the consortium told ABN it would like to know by Tuesday when a meeting can be arranged, the Journal said.
Meanwhile, if ABN stock hits the €35 level Monday morning (equivalent to $47.36) and then trades higher, Barclays will have to consider whether it should walk away from talks to buy ABN or perhaps offer a below-market price for the bank in the hope investors will accept the notion that ABN’s stock price already reflects a premium. ABN shares are up 23 per cent since March 19, when the bank said it had entered talks with Barclays.
One hurdle for the rival consortium is getting regulatory approval in the UK, Holland and the US. Barclays does not intend to pursue an offer until ABN resolves issues such as a US Justice Department money-laundering probe of ABN operations, the Journal said. Barclays could bet that the consortium’s potential bid collapses and that ABN’s surging stock will follow suit.
In Amsterdam Friday, ABN shares rose 0.1 per cent to €33.65. In an indicator the shares could pass €35, ABN’s American depositary receipts rose 5.4 per cent Friday to $48.28 (€35.68) in New York.
The strategy devised by RBS, Santander and Fortis in recent weeks and led by Merrill Lynch is to use largely cash and stock from one bank for a bid of about €36 a share, valuing the company at €66.7bn. If it were to offer €35 a share, a Barclays bid would value ABN at €64.86 bn.
That is the upper limit of a potential Barclays offer and more than the €33 bid many originally expected, the Journal said.