ABN Amro withdraws Barclays backing

The ABN Amro management and supervisory boards have withdrawn their recommendation that shareholders back a takeover by Barclays.

In a statement issued on Monday, the bank says that ‘the boards are not currently in a position to recommend either offer for acceptance’.
However, at a press conference later, ABN Amro CEO Rijkman Groenink said the bank still prefered the Barclay’s deal.
‘We think the merger plan ultimately offers more advantages for all interested parties,’ he said. The bank could not formally recommend Barclays because it offered less money than the consortium, he added.
Barclays has bid €66bn for ABN Amro, which is largely in shares. It wants to keep the ABN Amro group intact.
A consortium of three banks (Royal Bank of Scotland, Santander and Fortis) has made a largely cash offer of €71bn. It plans to split the group up, with Fortis taking over the Dutch banking operations.
ABN Amro originally backed Barclays when announcing a deal to merge with it in April. Barclays said on Monday it would continue with its bid despite the withdrawal of the board backing.
In the statement, ABN Amro said it would ‘further engage with both parties with the aim of continuing to ensure a level playing field and minimising any of the uncertainties associated with the offers’.
Also on Monday, ABN Amro reported a net profit of €1.13bn in the second quarter, down from €1.2bn in the same period last year. The bank said its first half earnings showed a ‘strong operating performance in conditions of corporate uncertainty.’

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