It’s over, folks. Barclays plc has withdrawn its bid for ABN AMRO. The proposed deal, which was first announced back in March, set off a firestorm of deals, counterdeals, and lawsuits, as a consortium led by Royal Bank of Scotland made a rival bid.
In the process, a little known yet highly influential investment fund called The Children’s Investment Fund was brought into the spotlight, Bank of America was allowed to buy ABN AMRO’s American subsidiary LaSalle Bank (after it threatened a lawsuit), and the ABN AMRO Board learned a valuable lesson in the unexpected blowback from unilateral decisions.
What on earth happened? It was just weird to watch. Now, with the RBS bid almost a sure thing, the breakup of the venerable bank will happen, as consortium members will take pieces for themselves. It was exactly the result that the ABN AMRO Board didn’t want, and plenty of actions were taken to avoid just such an outcome. But the shareholders have spoken, and the Board was denied.
RIP, ABN AMRO. What a long strange trip it’s been.
Comments
Samir Says:
October 5th, 2007 at 12:59 pm
Is there any chance that corporate ties played a role? Research from the blog NewsVisual (I actually think Barry Ritholtz mentioned them on Big Picture a few days back) shows that RBS and ABN have pretty strong corporate ties, and that perhaps these ties are what gave RBS an advantage to go along with its higher offer.
Mark Watson Says:
October 5th, 2007 at 7:27 pm
Bad, bad ABN! The baddest bank in the Netherlands - better than Citigroup and meaner than Wells Fargo!
http://www.abnamro.nl
Patrice Sarath Says:
October 8th, 2007 at 8:27 am
If corporate ties did have an effect, why not from the beginning? Remember, the board got in trouble because they agreed to Barclays’ offer right off the bat, making the agreement to sell LaSalle that got everyone howling.
The official story is that the board wanted to keep the bank intact, but the RBS consortium was more interested in divvying it up, hence the Barclays deal being the first choice. If the Barclays deal was a mere ploy just to start the bidding and sweeten any subsequent offers, the LaSalle side deal almost derailed the whole thing.
Since both Fortis and ABN are both huge Dutch financial services companies, the fact that they have board connections is probably not unusual. It would be more unusual if they didn’t, actually.
Anyway, it’s an interesting story. Thanks for the NewsVisual link — very cool site!
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