Group Said Set to Make ABN-AMRO Bid

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LONDON (May 25) - A trio of banks led by Royal Bank of Scotland will likely make a formal takeover offer for Dutch bank ABN AMRO on Tuesday, sources familiar with the matter said on Friday.RBS, Fortis and Santander who will provide an update on their plans to bid for ABN on Tuesday, currently view launching an offer as their preferred option, the sources said.Analysts had said earlier they expect the trio to either launch a formal offer or ask for an extension of their period of consideration until a legal wrangle is clarified.Several analysts said they expected the consortium to make a formal offer on Tuesday. Although the consortium may prefer to get more details on legal issues, stock market authorities are likely to apply pressure for more clarity, one said.ABN in April agreed an all-share takeover by Barclays, worth about 64 billion euros ($86 billion).But RBS and its partners said they could trump that offer and have outlined a mostly cash 71 billion euro proposal.HSBC, Europe's biggest bank, has frequently been named as a possible latecomer to the ABN battle, and analysts estimate it could achieve higher cost savings than rivals, but HSBC Chief Executive Michael Geoghegan declined to comment on whether he would consider a bid.Asked on Friday if he had looked at ABN, he replied: "I put the slide rule over everything, but I am not going to comment on the subject."The RBS-led consortium was required to provide an update on their plans by May 27, but the banks said that date had been postponed, as May 28 is a public holiday in Britain, Belgium and the Netherlands.The banks have so far been rebuffed by ABN management, with previous talks breaking down on the consortium's condition to also buy ABN's U.S. arm LaSalle Bank. ABN has agreed to sell LaSalle to Bank of America but a Dutch court has blocked the sale.
How to make money. RBS and Bank of America have held informal talks to try to resolve the dispute, sources familiar with the matter said, but it is unclear if they will find a compromise.Barclays said earlier this week it plans to publish its own agreed offer for the Dutch bank in six weeks and said it and ABN were making "excellent progress" with the key regulatory filings needed for their deal."Barclays has got a head start but ABN has done something that appears not to be in the shareholders' best interests and created an absolute muddle with the legal issue (regarding the sale of LaSalle)," said Bruce Packard, analyst at Pali International, a boutique firm servicing institutional investors."If you took away the legal issues there's one proposal (the RBS consortium) that's clearly offering more value to shareholders and you get cash," Packard said, but added a break-up of the bank would be complex and the legal risk was also a potential deal-breaker for the consortium.ABN shares rose 0.9 percent to 36.8 euros and Barclays closed up 1 percent at 720 pence. RBS rose 1 percent, Santander nudged up 0.3 percent and Fortis fell 1 percent.