ABN to mull over other options if talks fail

ABN AMRO Holdings NV intends to look at other options available to it if its merger talks with UK bank Barclays do not materialize. The alternatives include the likelihood of ABN AMRO continuing as an independent bank.

ABN AMRO said in an e-mailed statement, "It is not clear yet if our talks with Barclays will lead to a merger proposal," If negotiations are unsuccessful, "we will not only look at our standalone future but also at other alternatives."

Chief Executive Officer of ABN AMRO, Rijkman Groenink, who botched up the targets for investor returns that he established six years ago, is under enormous pressure from investors for a break-up of the company.

Barclays President Robert Diamond was buoyant and said he is "very
confident" about the former’s talks to buy ABN AMRO. He said, "We are in a very strong position."

Talks between the British bank and the Dutch bank Barclays and ABN had earlier resulted in a framework being formed for a merger for a combined bank. It was decided that the combined bank would be listed in London, headquartered in Amsterdam and have its two top jobs split.

ABN AMRO said that was not in favour of the demands made by shareholder The Children's Investment Fund (TCI) that the banking group be broken up and sold in parts.

The Banks however said that it will put forward the five proposals, presented by TCI, to its shareholders at its April 26 shareholders meeting. The bank, however, commented, "We do not believe the interests of our shareholders would be best served by the mere short-term cash generation actions embodied in the proposals that TCI has put forward for consideration."

If the merger between ABN AMRO and Barclays goes through, it would be one of the largest cross-border combinations in European banking history. Britain's Barclays has a market capitalization of about US$86 billion whereas ABN AMRO is valued at around US$76 billion. Together they'd rank as the world's sixth-largest bank, behind New York-based JPMorgan Chase & Co.