Barclays – which is competing with a consortium led by Royal Bank of Scotland in a takeover battle for Dutch lender ABN Amro – has raised its offer for ABN and included for the first time a cash element – 37% of the total. It is able to do that because of new major investments in Barclays from Asian state controlled companies. They are the China Development Bank and investment firm Temasek Holdings of Singapore. Temasek is taking a 2.1% stake in Barclays which it could increase by a further 1%. The Chinese will take 3.1% and could boost that to around 8%. As a result Barclays can put up its offer to 67.5 billion euros.
ABN’s board said both bids “have their merits and both will be assessed in a fair and transparent manner.” In April ABN backed a friendly takeover by Barclays. That was before RBS, Santander of Spain and Dutch-Belgian group Fortis came up with a counter bid which is 93% in cash. Barclays new offer is still below the RBS consortium’s 71.1 billion euros, but the London based bank says new long-term growth prospects through the Asian alliance should make it their deal be more attractive to ABN Amro5;s shareholders.