The Royal Bank of Scotland-led consortium planning a break-up bid for ABN Amro is today expected to end weeks of speculation by revealing details of its €71 billion offer for the Dutch bank.
The three banks in the consortium, which includes Santander of Spain and Fortis, the Belgian-Dutch group, are expected to announce details of the offer before the markets open today.
They are expected to set out the rationale for their bid - the largest in financial services history - and explain how they will carry out the three-way break-up, which has never been attempted before on a bank of ABN Amro's size. They are also expected to give more detail on the financing of the offer, the majority of which is likely to be in cash.
This will trigger a head-on battle with Barclays, the UK bank that has already agreed a €63 billion takeover bid for ABN Amro.
Barclays has argued that its offer is less complex and carries fewer risks than the break-up. But the consortium is expected to say the break-up bid will deliver greater cost savings, while reducing the execution risk by spreading ABN Amro's operations among three buyers.
However, the offer is likely to contain some important caveats. For example, it is expected to be conditional on ABN Amro keeping control of LaSalle, the US bank it has agreed to sell to Bank of America for $21 billion (€15.6 billion).
ABN Amro is appealing a recent Dutch court ruling that it must put the LaSalle sale to its shareholders, a move that prompted Bank of America to file a lawsuit in a New York court.
The consortium's bid is likely to need regulatory approval. - (Financial Times service)
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