ABN Amro (ABN) is offering no clues as to who will end up winning a bidding war for the Dutch bank, but investors may find out next Monday.
European market observers say the key to the race for ABN may be an Aug. 6 meeting where Fortis shareholders will decide whether to support a bid alongside Royal Bank of Scotland and
. The RBS-Fortis-Santander group is facing off against rival bidder
On Monday, ABN's board withdrew its official support for the Barclays offer, saying it is now neutral.
Financials analyst Dirk Peeters of KBC Securities in Brussels says shareholders who expect the consortium to win should buy ABN Amro shares, because they have higher to go to converge with the 71 billion-euro bid made by the consortium. Barclays' offer is worth 67.5 billon euros.
Asset managers who hold positions in the Dutch bank are warm to the chances of Fortis' shareholders approving a rights issue to raise the cash for the consortium's offer next week.
"ABN's announcement is just another momentum swing toward the consortium," says Dale Robinson, who helps manage over $5 billion at fund manager Edinburgh Partners in Scotland, and is also a shareholder in ABN Amro and RBS.
Robinson dismisses the chances of Barclays winning the bid. "It's logical now that shareholders will go with the higher financial offer of RBS," he says.
Justin Urquhart-Stewart, a director at Seven Investment Management in London and a former director at Barclays, concurs. "It'll be RBS. I don't think Freddy is done yet," he says, referring to RBS CEO Fred Goodwin's reputation for acquiring companies at top dollar.
In the past nine years as CEO of RBS, Goodwin has led the bank on an acquisitions binge involving 26 companies and costing a total of 33 billion pounds ($66 billion), according to
The Dutch bank is still not keen on the idea of the consortium splitting it apart, it says, but has now entered into talks with RBS and may subsequently change this position over time.
Robinson sees this as inevitable. "This is a fantastic entry point for RBS," he says. "Over the past few years RBS has been paying more for deals, but the returns on those deals have been impressive and they have all offered sensible synergies."
The bank's support for the Barclays offer was withdrawn in accordance with complex Dutch compliance law, said the bank's investor relations department in an interview. Officially, the bank has said that it cannot back a bid that is not in the financial interests of the shareholders.
Last week, Barclays enlisted China Development Bank and Singapore's Temasek Holdings in a deal worth up to 13.6 billion euros. The announcement, coupled with ABN Amro's official approval, was seen as a coup for Barclays.
While ABN maintains that Barclays' offer is still the best strategic bid, because it would keep the bank intact, it now says RBS' is the best financial bid.
Asset managers point out that as the likelihood of Barclays buying ABN Amro decreases, investors may be encouraged to buy more shares in the British bank.
Daniel M. Harrison is a business journalist specialising in European and emerging markets, in particular Asia. He has an MBA from BI, Norway and a blog at
. He lives in New York.