Hedge fund Atticus Capital LP has built a position in Barclays Bank and is now urging it to drop its €65 billion bid for Dutch banking giant ABN Amro. Barclays' shares spiked over 3% on speculation that the hedge fund's opposition will make the sale less likely. The fund said it would vote against the purchase and encourage other shareholders to do the same. Atticus's stake in Barclays is estimated at approximately $1 billion, or 1%. This is not the first time an activist hedge fund has affected the fate of ABN: in February, TCI Fund Management LLP, which holds a 2% stake in ABN, demanded it either sell itself or break itself up. That demand led to the Barclays offer, which was accepted by ABN and then topped by a bid from a consortium of three European banks, led by the Royal Bank of Scotland [RBS]. Atticus believes Barclays is undervalued and expects its shares to rise if the ABN bid is suspended. "The views expressed by Atticus...are not representative of the feedback we have received from shareholders who remain supportive of our strategy," Barclays said in a statement Sunday. In related news, U.S. private equity investor Christopher Flowers has become a central player in the negotiations between the RBS-led consortium and Bank of America, which has agreed to purchase ABN's U.S. holding LaSalle Bank -- a holding RBS wants.
Sources: MoneyCentral (I, II), Reuters, Wall Street Journal
Commentary: ABN Mulling RBS Consortium Bid; Supervisory Board Enters Takeover Fray • ABN Amro Agrees to Sell Itself to Barclays for $91 Billion • Hedge Fund Threatens Legal Action Unless ABN AMRO Listens to All Offers
Stocks/ETFs to watch: ABN Amro Holding N.V. (ABN), Barclays PLC (NYSE:BCS), Royal Bank of Scotland Group plc [ADR] (RBSPY), Fortis NV [ADR] (FORSY), Bank of America Corp. (NYSE:BAC). ETFs: First Trust Morningstar Div Leaders Idx (NYSEARCA:FDL), PowerShares Intl Dividend Achievers (NASDAQ:PID), iShares MSCI Netherlands Index (NYSEARCA:EWN)
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