Barclays bids €70bn for ABN

The supervisory board of ABN Amro was last night meeting to discuss recommending a take-over bid from British bank Barclays that values the Dutch lender at almost €70 billion.

According to people close to the negotiations, the supervisory board's approval would clear the way for the British bank and ABN Amro to outline the terms of their deal today.

However, the sources warned that an agreement could not be assured and any announcement could still be delayed.

The supervisory board's meeting marked the culmination of more than a month of negotiations between Barclays and ABN about a deal that would create one of the world's largest banks by market capitalisation.

It came the day before ABN Amro was due to hear details of a rival break-up bid by Banco Santander of Spain and Fortis, the Belgo-Dutch banking and insurance group.

The Barclays offer is understood to value each ABN Amro share at about €36 - close to where the Dutch bank's shares closed on Friday.

Barclays is expected to justify the bid - a substantial premium to the price at which ABN Amro's shares were trading before the two sides confirmed their discussions - by outlining potential cost savings worth at least €3 billion.

It is also expected to announce its intention to explore a sale of ABN Amro's US subsidiary, LaSalle.

Reports yesterday said that Barclays' chief executive, John Varley, had received expressions of interest in the Chicago-based operation from the likes of Bank of America, BNP Paribas, Citigroup and Wachovia.

La Salle is thought to be worth around €7 billion.

John Varley, Barclays' chief executive, would run the combined bank and ABN Amro is expected to nominate Arthur Martinez, chairman of its supervisory board, to be chairman.

Rijkman Groenink, ABN Amro's chief executive for seven years, is expected to step aside.

The combined bank is expected to be called Barclays Group, although its headquarters would be in Amsterdam.

- (Financial Times service)