Barclays ups ABN Amro offer, is it enough?

Barclays bank has increased its offer for Dutch banking group ABN Amro after agreeing a €13.4bn investment package with the Chinese and Singaporean governments, the British bank said in a statement on Monday morning.

Barclays increased its offer for ABN Amro to €67.5bn, of which €24.8bn is in cash. Barclays’ chairman John Varley (photo) said he ‘hoped and expected’ that the revised bid would get the backing of the ABN Amro board.
A consortium of three other banks – Royal Bank of Scotland, Fortis and Santander – is also vying for ABN Amro and has offered €71bn, in a 93% cash deal.
Analysts said they did not think Barclays had gone far enough. ‘It should be closer to €80bn. They need to make a clear difference,’ said one ING analyst. At Rabo Securities analysts noted that the consortium bid was still 7% above the Barclays deal.
In a statement, ABN Amro said the Barclays deal with the China Development Bank ‘further enhances the growth opportunities of the combined group in the attractive Asian market and can result in the creation of additional long-term value for ABN Amro shareholders’. It will publish its preference in the short term.
In an interview with the NRC on Saturday, ABN Amro chairman Rijkman Groenink said a majority of ABN Amro’s shareholders supported the mainly-cash takeover bid by the consortium. Groenink said the Barclays bid was ‘better in terms of content but not enough in terms of money.’

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