ABN Amro Plunges on Rumors Buyout May Fall Through

Shares in Dutch bank ABN Amro plunged up to 11% Friday, and were down 5% at noon in Amsterdam, after the Dutch daily Het Financieele Dagblad reported Fortis is having problems financing its €24 billion stake in the deal to buy ABN, with partners Royal Bank of Scotland and Santander. There was also speculation Barclays may withdraw its bid. The RBS consortium's mostly-cash offer of €71B ($97.83B) is financially superior to Barclays' €65.4B stock-and-cash offer. On July 30, ABN Amro withdrew its recommendation of the Barclays bid and is now 'neutral' (full summary). Current market conditions could jeopardize the deal, Oriel analyst Mike Trippitt told Bloomberg. "If you believe the market, the current share prices are telling you the deal isn't going to happen." The concerned parties denied anything was amiss. A spokesman for ABN Amro said Friday there are "no new developments" in the buyout process, and a Fortis spokeswoman said its financing is secure. "We can choose the right moment for every type of transaction" related to the acquisition. Fortis shareholders approved the bid earlier this week, and backed a €13 billion rights offer to finance its portion. Fortis CFO Gilbert Mittler told reporters on Thursday it had a €10 billion bridge loan to allow it to sell assets at appropriate moments, and that Fortis wants to securitize about €2 billion in assets, but that "Aug. 9 was not the most appropriate moment" for doing so. ABN Amro's ADR's are down 7.3% in pre-market trading on the NYSE.

Sources: Bloomberg, Reuters
Commentary: ABN AMRO: Subtle Valuations In Takeover Battle • 17 Ways to Invest in The Netherlands
Stocks/ETFs to watch: ABN, BCS, FORSY, RBSPY.PK

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