I suppose my uncle the financier will disagree with me violently but I'm very supportive of ABN Amro remaining a viable entity and rejecting the Royal Bank of Scotland's bid.
The deal is that ABN Amro recently agreed to be acquired by Barclay's bank. A bit sad that a 183-year old institution would be acquired but at least it would continue to exist.
Just as the news of this bid came out, RBS and a coalition of other banks put in a higher bid. Key to that was that an American property of ABN would not be sold.
However, with their bid ABN would be broken up and the parts sold to the coalition members.
Of course, one might imagine that this would be disastrous for the employees and a very old Dutch bank would cease to exist.
Weighing this against the Barclays bid, which is for about 4 euros less per share, it seems reasonable to imagine that the bank's management would want to take the Barclay's bid - which keeps the bank as operating as an entity.
But there is a shareholder revolt in progress, as a large trust which owns about 4% of the stock, wants the management to take the RBS bid. From what I can see it's a question of balancing the preservation of a lot of Dutch jobs against the immediate gain in stock value in taking the higher RBS bid. If it was purely money, I would see the sense. But it seems akin to the "raid and strip" practices of raiders like Icahn in the '80s and I dislike the idea that RBS will succeed.
Posted by artandscience at April 26, 2007 02:33 PM