Barclays Withdraws $84B ABN Amro Offer

Discussion in 'Wall St. News' started by S2007S, Oct 5, 2007.

  1. S2007S

    S2007S

    hmmm, lack of interest in its offer, they could of come up with a better excuse than that.





    AP
    Barclays Withdraws $84B ABN Amro Offer
    Friday October 5, 8:07 am ET
    By Toby Sterling, Associated Press Writer
    Barclays Withdraws From Bidding for ABN Amro, Citing Lack of Interest in Its Offer

    AMSTERDAM, Netherlands (AP) -- Britain's Barclays PLC withdrew a $84 billion offer for ABN Amro Holding NV on Friday, the largest attempted takeover in the history of the financial industry.

    The concession, which had been widely expected, leaves a consortium led by Royal Bank of Scotland PLC in position to buy ABN Amro in a deal worth 70.5 billion euros ($99.9 billion).

    The consortium plans to carve up ABN Amro and divide it among three financial institutions. Barclays had said it would keep the bank whole.

    Barclays said that fewer than 80 percent of shares had been tendered for its cash-and-shares offer, worth 62.2 billion euros ($88.1 billion), or 33.56 euros ($47.53) per ABN Amro share at Barclays' current share price.

    The RBS bid, which closes Friday, is worth 13 percent more than the Barclays bid, or 38.04 euros ($53.88) per ABN share.

    Barclays said it would demand a 200 million euros ($280 million) breakup fee as a result of losing the takeover fight.

    "This break fee will significantly exceed the costs that Barclays incurred" in launching its offer, the bank said.

    The RBS consortium has emerged ever more clearly as the favorite to buy ABN Amro Holding NV in recent weeks, as its bid was always worth more than Barclays. Its offer had cleared various regulatory and fundraising hurdles.

    At a shareholders' meeting on Sept. 20, ABN Amro Chief Executive Rijkman Groenink -- who favored Barclays because it wanted the bank intact -- conceded that that was unlikely to happen.

    "The market expects that the overwhelming majority of shareholders will chose for the consortium's bid," he said.

    Groenink had argued that the Barclays takeover was more consistent with ABN's own strategy and that the consortium bid was worth more but carried greater risks. He said it would amount to a "carve up" of ABN Amro.

    Among the consortium, Fortis NV of Belgium wants ABN's Dutch operations, Banco Santander Central Hispano SA of Spain wants its Brazilian and Italian arms, and RBS wants the rest, including ABN's investment banking arm.

    RBS's offer closes Friday afternoon, and it is expected to announce victory in the takeover fight, which began in March. However, it will likely extend its offer to allow holdout shareholders more time.

    ABN's shares were flat at 37.71 euros ($53.41).