RBS-led group launches 71 bln euro ABN bid

A consortium led by Royal Bank of Scotland (RBS.L: Quote, Profile, Research) said on Friday it has formally launched its 71.1 billion euro ($98.2 billion) bid for Dutch bank ABN AMRO (AAH.AS: Quote, Profile, Research) as it attempts to beat rival suitor Barclays (BARC.L: Quote, Profile, Research) to the biggest-ever bank takeover.
The consortium, which also includes Spain's Santander (SAN.MC: Quote, Profile, Research) and Belgian-Dutch group Fortis (FOR.BR: Quote, Profile, Research), said the initial offer period would run until Oct. 5 but could be extended.
RBS, Britain's second-biggest bank, also said late on Friday its underlying operating profit in the six months to the end of June would be at least 5 billion pounds, which was the average analyst forecast and up 9 percent from 4.6 billion in the first half of 2006.
RBS said the results due for release on Aug. 3 would show "good organic growth in income, disciplined expense control, measured investment in faster-growing businesses and continued strong credit metrics."
It made the update as about 7 percent of the consortium's offer would be paid in RBS shares.
The consortium launched its offer after receiving regulatory clearance from regulators in Britain and the Netherlands.
The offer would be declared unconditional if shareholders representing 80 percent of ABN's shares accepted it.
The consortium said earlier this week it would offer 38.40 euros per ABN share, of which the cash component would be 93 percent.
Its offer is about 10 percent higher than an all-share offer from Barclays, currently worth about 35 euros per ABN share.
ABN's boards have recommended Barclays' offer, but ABN said on Wednesday it planned to discuss the revised offer with both the consortium members and Barclays, prompting speculation that it could switch its recommendation.
If ABN chose to switch, it would be obliged to notify Barclays, which would have five days to respond, according to an SEC filing on their original deal.
Barclays said on Thursday it might sweeten its offer by adding cash; but analysts said it is unlikely to be able to outbid the consortium, and some of its investors have urged it not to get into a bidding battle.
Either bid would rank as the world's biggest bank takeover.
The consortium plans to break up ABN, which has more than 4,500 branches across 53 countries.
RBS would get ABN's wholesale and investment banking unit and its Asian businesses; Santander would buy ABN's Italian bank Antonveneta and its Brazilian bank; and Fortis would get ABN's Dutch operation to create a dominant Benelux retail bank, and also its wealth and asset management business.
ABN's shares have jumped more than 45 percent since a hedge fund investor urged the bank in February to break up or sell the bank. ($1=.7242 Euro)