Hedge funds and private equity groups have managed to earn themselves a reputation for being locusts – descending on a company, eating it bare and them leaving for pastures new.
Either that, or they behave like a spoilt child, screaming and screaming that they want more sweets, threatening legal action and drawing up action lists for management to follow, or face the consquences.
Take ABN Amro bank, under siege from a hedge fund which is thought to own around just 3% of its shares. The hedge fund in question, appropriately named The Childrens’ Investment (TCI) fund, wants ABN Amro to split itself up and sell itself off – so that shareholders (ie itself) can get more money.
The Dutch bank is now in exclusive talks with Barclays. So in a fine display of child-like foot-stamping arrogance, TCI says it will go to court if ABN Amro does not open its books to other offers.
So who else is sulking on the sidelines? Step forward three vultures in the form of the Royal Bank of Scotland, Santander and Fortis, who have decided they want to buy ABN Amro themselves. Their plan is to buy the Dutch group and rip it up between themselves, picking out the bits which best fit in with their own plans.
Anyone would think ABN Amro was a half-dead company with no prospects for recovery rather than one of the biggest banks in the world with earnings of €4.7bn last year.
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