The consortium led by Royal Bank of Scotland has improved its bid for ABN Amro of the Netherlands, putting further pressure on ABN’s agreed deal with Barclays. While keeping the amount it is offering unchanged, RBS has increased the cash component from 70% to 93%.
Royal Bank of Scotland, Spain’s Banco Santander and Belgium-Dutch group Fortis are bidding 71.1 billion euros – now mostly in cash – while the deal that ABN favours with Barclays is for 64 billion, all in shares.
RBS and the others have not pulled out, even though a Dutch court last week allowed the sale to go head of ABN’s US unit LaSalle. The consortium had wanted to keep LaSalle, but now will receive the cash from its sale if they win the battle for ABN.
Barclays said it will go ahead with its bid only if the terms are right, but a number of its major investors are getting worried that it could end up in a costly price war. Some shareholders are luke-warm, or even opposed, to the idea of a sweetened bid from Barclays. Conscious of that, Barclays said it will only proceed if the purchase produces attractive results for its shareholders.