Monday, July 30, 2007
The Managing and Supervisory Boards of ABN AMRO today announced that they would no longer recommend the Barclays offer to combine with ABN AMRO. Instead, the boards announced that they were not "currently in a position to recommend either" the Barclays offer or the Royal Bank of Scotland consortium "[o]ffers for acceptance to ABN AMRO shareholders". As at the market close on 27 July 2007, the Barclays offer was at a 1.0% discount to the ABN AMRO share price and the RBS consortium offer was at a premium of 8.5% to the ABN AMRO share price; 9.6% higher than the Barclays offer.
This essentially leaves the battle for ABN AMRO in the hands of its shareholders. Nonetheless, there are structural differences which may influence the contest. The RBS consortium is proceeding through an exchange offer structure (see the Form F-4 here, it is a nice precedent for a U.S./Dutch cross-border exchange offer). The Barclays offer is pursuant to a Dutch merger protocol. RBS has launched its offer and Barclays today stated that it intended to make its offer documentation available on August 6. Given the need for all of the parties to obtain regulatory and other approvals, it is likely that they will remain on the same timing track. Thus, ultimately, the contest now largely depends on the share price of Barclays increasing during this time period sufficiently to justify its acquisition proposal: an uncertain prospect in today's volatile markets.