Barclays rules out disposals to sweeten ABN bid

By Sean Farrell, Financial Editor
Published: 15 September 2007

Barclays yesterday ruled out selling parts of ABN Amro to sweeten its offer for the Dutch bank, which lags behind a rival bid by Royal Bank of Scotland.

John Varley, Barclays' chief executive, added that the falling value of his bank's share-based bid reflected ABN's true value in turbulent markets, unlike the largely cash offer from the RBS consortium.

"The fit between Barclays and ABN Amro is a really great fit. It would not be interesting to us to take its portfolio and take bits and pieces of it," Mr Varley told shareholders at an extraordinary general meeting to approve the merger.

ABN tried to head off RBS's bid by agreeing to sell Lasalle, the US business that RBS wanted, to Bank of America for $21bn (£10.4bn). Barclays had previously not ruled out proposing a sale of other parts of ABN's business to return cash to ABN shareholders.

Mr Varley added that ABN's market value was 8 per cent below the consortium's €71bn (£48.9bn) bid, reflecting doubts about the consortium's ability to do the deal. "The stock market, which is seldom wrong about these things, is indicating at the moment that the outcome is far from certain," he told shareholders at Barclays' building in Canary Wharf, London.

Barclays has been in talks to buy ABN since February. Its agreed deal was gatecrashed by RBS, Santander of Spain and Belgium's Fortis, which want to divide up ABN's business. To win ABN, Barclays is now relying on the consortium failing to finance its bid or falling foul of regulators.

If Barclays does win the battle, it will replace its 279-year-old eagle logo with ABN Amro's green and yellow shield, Mr Varley said.

Barclays said 90 per cent of shareholders voted in favour of the deal, well above the 50 per cent needed. ABN holds a shareholders' meeting next week to discuss the rival bids. Both offers close in the first week of October.