BELGIUM: Belgium-Dutch financial group Fortis wins huge initial backing for ABN buy

Record ID: 784566

  • Title: BELGIUM: Belgium-Dutch financial group Fortis wins huge initial backing for ABN buy
  • Date: 6th August 2007
  • Summary: (W3) LONDON, UNITED KINGDOM (FILE) (REUTERS) VARIOUS OF EXTERIOR OF BARCLAYS BANK BUILDING/ BARCLAYS BANK LOGO SIGN
  • Embargoed: 21st August 2007 13:00
  • Keywords:
  • Location: Belgium
  • Country: Belgium
  • Topics: Finance
  • Reuters ID: LVA3YK88DA38GM54QLRRCB8BHF39
  • Story Text: Shareholders have given their overwhelming support to the Fortis bid for ABN AMRO in the biggest ever banking takeover.
    Belgian-Dutch financial services group Fortis <FOR.BR> clinched overwhelming initial support from shareholders on Monday (August 6) for its part of a three-bank bid to buy ABN AMRO <AAH.AS> in the biggest ever bank takeover battle.
    At the first of two extraordinary meetings on Monday (August 6), over 90 percent of votes in Brussels backed Fortis's proposed purchase of ABN AMRO's Dutch operations as well as the 13 billion euro rights issue it needs to finance it.
    Fortis <FOR.AS>, Royal Bank of Scotland <RBS.L> and Spain's Santander <SAN.MC> have offered 71 billion euros (97 billion US dollars) for the Netherlands' largest bank in a bidding war that has featured legal and stakeholder battles.
    Rival Barclays <BARC.L> formally launched its 65 billion euro bid on Monday.
    With two competing offers now on the table, ABN's management said that it will hold a meeting for its shareholders on September 20 discuss the offers. ABN's fate, however, will be determined by which bidder its shareholders choose before the offers expire in early October.
    Analysts had expected Fortis to win approval even though its shares have fallen almost 20 percent since it announced that it would contribute 24 billion euros to the deal, which it would finance with Europe's second largest ever rights issue.
    With 95.45 percent of Fortis shareholders approved the plan to take over ABN, easily clearing the required majority vote. For the rights issue, which were separated into three votes for different parts of the funding, more than 90 percent voted in favour, clearing the required 75 percent.
    Fortis shares, down about 1 percent in early trading, slipped lower after the vote and were down 1.9 percent at 27.91 euros at 0945 GMT.
    Fortis wants shareholders at meetings in Belgium and the Netherlands on Monday to back its vision of becoming the biggest bank in the Benelux and support the rights issue.
    "The Fortis ABN AMRO combination will constitute a formidable European competitor. Based on 2006 figures, as you can see, ABN activities which we will purchase will bring to the group and added profit of 28 per cent of our current profit," said Jean Paul Votron, Fortis Chief Executive.
    Fortis needs the backing of 50 percent of the shares represented for the deal and 75 percent for its planned rights issue in four votes at the morning meeting in Brussels and at the afternoon session in Dutch city Utrecht (from 1300 GMT).
    Votron said that the deal would cost Fortis a 24 billion euros in cash.
    "Fortis will also receive 33.8 percent common assets as well as the right to use the ABN AMRO name. For this Fortis will pay 24 billion euros in cash," Votron said.
    Fortis said the Brussels vote gave them confidence but that they still wanted to see what was going to happen in Utrecht.
    Unless shareholders represented in the Netherlands meeting have a radically different view from those in Belgium, Fortis will prevail and will keep its consortium's bid on track.
    "I voted in favour of a capital increase because I'm convinced is the only solution on the european market. We have to be big enough to be able to compete with the market in the United State or Asia," said one share holder, Claude Vandewaeter.
    "I'm surprised and at the same time I'm touched," said Fortis chairman Maurice Lippens ABN noted the vote, but declined further comment.
    Lippens added that he was excited about the merger project.
    "That's a fantastic project, it' a unique opportunity for Fortis as well as ABN AMRO, so I think we are on the right track," Lippens said.
    "Let's drink to the Stalinist vote," said one shareholder
    "I voted at favour and I'm delighted because I believe it will be a good project," said another.
    Barclays has said it would keep ABN AMRO largely intact and make Amsterdam the combined group's headquarters. ABN backed Barclays' original offer in April but withdrew its formal recommendation last week.
    In an unusual joint statement from ABN and the consortium on Sunday, the two sides said they would maintain constructive dialogue. ABN has made clear, however, that it prefers the Barclays offer.
    Barclays' offer period will run from Aug. 7 until Oct. 4, Barclays said in a statement published in a Dutch newspaper on Monday. The RBS consortium's offer period started July 23 and runs until Oct. 5.
    RBS shareholders will vote on Friday and are widely expected to support the group's plan.
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