Barclays Loses Battle for ABN Amro
Barclays Bank will today accept defeat in the battle to buy ABN Amro after battling for six months to complete the world's biggest banking takeover.
The bank has since May been locked in combat with a consortium led by Royal Bank of Scotland to buy the Dutch bank, but Barclays' share-based offer has lagged RBS's largely cash bid all summer and stands about €10bn short of the consortium's €71bn (£49bn) offer. It is understood Barclays will therefore formally concede today.
Barclays' bid lapsed yesterday and the consortium's will end today. With the offers closed, it is up to the banks to tot up the number of acceptances from ABN's shareholders. RBS is unlikely to put out a full statement until Monday at the earliest.
Barclays' chief executive, John Varley, wanted to buy all of ABN to form a so-called universal bank that would challenge established global giants such as Citigroup and HSBC. It agreed a deal with ABN in April, but Sir Fred Goodwin, the chief executive of RBS, crashed the party with his joint bid alongside Santander of Spain and Belgium's Fortis. The consortium will divide up ABN's business between them.
Some believe missing out on ABN leaves Barclays open to a bid and that it may try to do another big deal of its own soon.
Barclays and Bank of America are known to have talked to each other in the past, but few think the US bank will pounce in the near term.
Barclays' shares rose 2.3 per cent yesterday. but have fallen by about a fifth since February.
"I think the wish of John Varley and the top team is to try to do something else transformational, but they will have to bide their time and get some currency back into their share price," said the Oriel Securities analyst Mike Trippitt. "I don't buy the instant bid story. This is still a company with a 40-odd billion market value which is a big chunk for anyone to bite off."
The deal would have accelerated Barclays' aim of increasing its international operations to account for about 75 per cent of profit from about half now.
Investors will be watching to see if Barclays has another deal in mind, though Mr Varley has said ABN was a specific opportunity and that the bank is able to grow its international business on its own or with smaller deals.
Barclays may not be able to rely on such rapid growth from the Barclays Capital investment bank, which rode the wave of the booming credit markets to become Barclays' most important business. Those markets are now far less active after the credit crunch.