LONDON (Thomson Financial) - Banco Santander Central Hispano, the Spanish banking giant, is working on plans to table a counterbid for ABN Amro in league with its long-term ally Royal Bank of Scotland PLC, according to The Sunday Telegraph.
The newspaper did not name its source for the story, but said the move would disrupt the proposed 80 bln stg merger between ABN and Barclays PLC. The newspaper said the two banks believe they could generate a bigger premium for the Dutch bank's shareholders than the proposed Barclay's deal.
A spokeswoman for Royal Bank of Scotland refused to comment on the situation.
The newspaper said that under the potential transaction, Santander would take control of ABN's retail banking operations in continental Europe, as well as its South American businesses. RBS would acquire La Salle, ABN's US retail bank, as well as ABN's wholesale banking operations, which would be integrated with its existing corporate and investment banking operations, it added.
Goldman Sachs and Merrill Lynch, long-term advisers to both banks, are understood to be working on the proposed deal, the newspaper said.
An offer from the consortium could be presented soon after an agreed deal being announced by Barclays and ABN, which is expected within the next ten days, the article continued.
John Varley, the chief executive of Barclays, and Rijkman Groenink, his counterpart at ABN Amro, are understood to be in the final stages of negotiations over finer points of the agreement.
The board of Barclays is understood to be debating whether to offer RBS the chance to buy La Salle on completion of its deal with ABN, in an effort to remove the threat of a counterbid from the consortium.
Although Barclays believes La Salle would make a good fit for its own business, Varley is said to be attracted by the potential to reduce the execution risks on any transaction.
Speculation also continues to mount on the possibility of a bidder emerging for Barclays, should it fail to agree a deal with ABN. Jamie Dimon, the chairman and chief executive of JP Morgan, is monitoring the situation, according to industry sources.
A deal involving RBS and Santander would renew a partnership between the two banks that was broken up after the Spanish group bought Abbey in 2004. tf.TFN-Europe_newsdesk@thomson.com ml/ro COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
© 2007 AFX News
