Trio of European Banks Eyes ABN Amro

A consortium of three of the biggest banks in Europe has approached ABN Amro about a possible takeover, potentially disrupting ABN's talks with Barclays. The Royal Bank of Scotland [RBS] has joined forces with Spain's Banco Santander Banespa Spa and Belgium's Fortis in asking ABN to share its books after its period of exclusivity with Barclays ends tomorrow. ABN is under pressure from activist shareholders to exact the highest price possible, so it is expected to grant the trio access to its financial data -- particularly as RBS will allegedly "go hostile" if its friendly overture is rebuffed. The trio's joint bid is said to entail the breakup of ABN's retail and wholesale operations. RBS would take over ABN's U.S. retail bank, LaSalle, and ABN's wholesale bank in London; while Santander would take ABN's assets in Brazil and Italy and Fortis would acquire ABN's Benelux assets. Analysts believe the group's higher cost savings should allow it to offer upward of €40 per share, while Barclays is said to have a ceiling at €35.

Sources: Wall Street Journal, Reuters, Forbes
Commentary: Hedge Fund Threatens Legal Action Unless ABN AMRO Listens to All Offers • Barclays To Acquire ABN: Long-term Investor Horizon Required • Citigroup Advising Barclays on ABN Amro Bid
Stocks/ETFs to watch: ABN Amro Holding N.V. (ABN), Barclays PLC (BCS), Royal Bank of Scotland Group plc [ADR] (RBSPY), Fortis NV [ADR] (FORSY). Competitors: HSBC Holdings plc ADR (HBC), Deutsche Bank AG (DB), UBS AG (UBS). ETFs: First Trust Morningstar Div Leaders Idx (FDL), PowerShares Intl Dividend Achievers (PID), iShares MSCI Netherlands Index (EWN)

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