Atticus Agitates at Barclays

The hedge fund pressures the banking giant to drop its merger plans with ABN Amro.
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Shares of

Barclays

(BCS) - Get Report

climbed Monday on news that hedge fund Atticus Capital is encouraging the company to drop its planned acquisition of

ABN Amro

(ABN)

.

The New York-based hedge fund run by hockey player-turned-hedge fund manager Timothy Barakett holds a $1 billion, or 1% stake, in the U.K. banking giant, according to the

Wall Street Journal

.

According to the

Journal

, Atticus recently met with Barclays executives to discuss the bid. The fund reportedly said that Barclays shares are undervalued but would rise if the company dropped its plan to buy the Dutch bank.

"The views expressed by Atticus Capital are not representative of the feedback that we have received from shareholders, who remain supportive of our strategy," Barclays said in a statement. "If other shareholders feel differently, we encourage them to engage in a dialogue with us. We believe this transaction will create significant incremental value for our shareholders and meets our rigorous financial criteria."

A spokesman for Atticus Capital did not immediately return a phone call for comment.

Barclays shares recently were up 41 cents to $57.72. Shares of ABN Amro fell 48 cents to $46.98.

Regardless of Atticus' agitating, Barclays still is facing several hurdles in its deal.

ABN agreed to the $91 billion deal in April amid pressure from shareholder the Children's Investment Fund to boost its share price. As part of the Barclays transaction,

Bank of America

(BAC) - Get Report

agreed to purchase ABN Amro's U.S. retail bank,

LaSalle Bank

, for $21 billion.

Just days later, a consortium including

Royal Bank of Scotland

,

Banco Santander

(STD)

and Fortis offered to buy the Dutch bank in a deal worth about $95 billion, but only if LaSalle came with the sale.

The consortium said it would break up the Dutch conglomerate -- a notion that ABN's CEO, Rijkman Groenink, has detested.

Also complicating matters for ABN Amro-Barclays deal is a Dutch court, which froze the Bank of America transaction earlier this month, saying that the LaSalle sale must be approved by shareholders.