EuroLinks Daily View: A Citigroup Swoop on ABN Amro Might Win Some Spoils -- or More
Ever since news emerged that ABN Amro Holding NV was not only in play but in exclusive takeover talks with Barclays PLC of the U.K., it has seemed to be only a matter of time before other big banks began circling. The real question was whom. Now comes news that a faction within U.S. giant Citigroup Inc. is pushing Chairman and Chief Executive Charles Prince to bid for the big Dutch bank.</br></br>The fact that any move would have to be unsolicited, and might be considered hostile, complicates matters. Hostile takeover bids in the banking industry are difficult to win, and hostile deals of all stripes are particularly tough in the Netherlands, where companies enjoy many defenses that aren't allowed elsewhere, as Carrick Mollenkamp, Jason Singer and Dennis K. Berman report. Indeed, the Dutch central bank has already said it would frown on such a situation.</br></br>However, ABN Amro and Citigroup have complementary businesses in the U.S. and Latin America, and a deal would give Citigroup a stronger foothold in continental Europe. There also is the possibility that Citigroup could push for part of ABN's assets, such as Chicago-based LaSalle Bank or Banco ABN Amro Real SA of Brazil, each of which contribute about 17% to ABN's overall revenue.</br></br>Nonetheless, the Dutch community might not like a Citigroup bid, fearing it would reduce the bank's Dutch headcount aggressively, according to corporate government consultant Jaap Koelewijn. But he also considers the proposed Barclays takeover no more than a diversion, arguing that active investors won't accept it because other competitors could achieve greater synergies and hence be able to pay a higher premium.</br></br>Read Carrick Mollenkamp, Jason Singer and Dennis K. Berman's report: http://online.wsj.com/article/0""SB117462029775746489,00.html