Third way

13 April 2007

It sounds amazingly audacious and may just be a spoiler. But a threeway deal could put Barclays own merger plans under pressure. The three could almost certainly deliver more synergies. ABN s own shareholders may demand it investigates further.

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Royal Bank of Scotland has teamed up with Banco Santander and Fortis to make a threeway bid for ABN Amro.

The three banks are understood to have approached the Dutch ban through their advisers, Merrill Lynch, to obtain information. ABN is in exclusive merger discussions with Barclays but these expire on 18 April. RBS has asked for a response by 17 April.

Barclays is understood to be pressing ahead with its own discussions.

The trio have not yet decided what they might pay for ABN's shares. But any offer could be denominated in a complex mixture of RBS, Santander and Fortis shares, and may also contain some cash.

The bid, if made, would involve a breakup of ABN. Royal Bank is likely to buy ABN's wholesale, US and Asian assets, while Santander would take the Brazilian and Italian assets. Meanwhile Fortis would buy the Dutch business.

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