RBS could have beaten Barclays in race for ABN Amro

11 September 2007

Barclays may lose out to Royal Bank of Scotland (RBS) in the fight to land ABN Amro, the Dutch Bank.

Barclays shares closed at 580p last night, 20 per cent down on the level six months ago, which means the bid for Amro is lower than the cash heavy offer from RBS.

Bob Diamond, president of the bank, said: "The bad news is if the consortium still wants to pay that price; if it's comfortable with the risks on the balance sheet during the turmoil; if they can raise that money in the market, and if the regulators are going to allow… this kind of complex transaction, then that price will probably beat ours.

"But there are a lot of ifs between now and then. We have to take into context that the Markey environment has changed. Do we still want ABN? Yes," reported the Guardian.

Ralph Brook-Fox, a fund manager at Resolution Asset Management which owns stakes in Barclays and RBS told City AM that Mr Diamonds' assessment of the situation was quite realistic.

But he noted that the RBS consortium has the option to change the offer, "My understanding is that they would have to table a new bid rather than amend this one, meaning they would have to get regulatory clearance all over again."

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