David Slager of hedge fund Atticus Capital will warn Barclays CEO John Varley on Wednesday that Atticus will block Barclays' pending offer to buy ABN Amro, according to reports. Atticus, which holds a 1% stake in Barclays, views the acquisition as contrary to shareholder interest. "Barclays should not be using its undervalued paper to buy ABN Amro in a competitive auction," said Slager. Though the fund does not have enough voting power to block the purchase unilaterally, Slager is "canvassing shareholders" and is "confident...the deal will be blocked" if Barclays does not withdraw it. The tactic is reminiscent of that of TCI Fund, which instructed then-CEO Werner Seifert of Deutsche Börse to drop his bid for the London Stock Exchange and then forced him out when he did not comply. Naguib Kheraj, the Barclays executive running the bid, said, "We’ve spoken to a lot of shareholders and while there will always be some who express doubts, the vast majority are supportive." Barclays is considering adding a cash sweetener to its €65 billion offer in the event that it will have to match or exceed a rival bid from a Royal Bank of Scotland-led consortium for ABN. All parties to the sale of ABN are awaiting the decision by a Dutch court on whether or not ABN's sale of LaSalle Bank to Bank of America can go through. The Barclays offer for ABN is contingent on completion of that sale.
Sources: Times Online, MarketWatch, Hemscott, Forbes
Commentary: Atticus Fund to Barclays: Drop Your Bid for ABN Amro • Barclays Might Sweeten Bid for ABN -- FT • ABN Mulling RBS Consortium Bid
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)