Fortis shareholders back ABN bid

Fortis, the Belgian-Dutch financial services group vying to buy ABN Amro in the biggest ever financial services takeover battle, has progressed towards victory after winning approval from its shareholders.

Following two extraordinary meetings in Brussels, over 90 per cent of the votes fell in favor of the proposed takeover and also the €13 billion ($17.83 billion) rights issue required for its finance.

The rights issue is the largest ever attempted in Europe and amounts to about a third of Fortis' market capitalization.

However, Fortis still needs approval of shareholders represented at an afternoon meeting in Utrecht, the Netherlands.

Barclays formally launched its €65 billion bid on Monday which has been overpowered by the 71 billion euros ($97 billion) offer made by Fortis, Royal Bank of Scotland and Spain's Santander.

With strong backing from Fortis shareholders the RBS-led consortium gains an edge over rival Barclays, whose bid is being affected by its lowered share value.

ABN, which recently withdrew its recommendation from the Barclays, has scheduled a meeting for September 20 to discuss the two offers and let the shareholders decide which bidder to consider.

Even though Fortis shares have dropped by almost 20 per cent, analysts had expected it to win the approval since it announced that it would contribute €24 billion to the deal, which would be financed with Europe's second largest ever rights issue.

Fortis got critical support from rivals ING and Rabobank, who hold large stakes in the Belgian business. Chief executive Jean-Paul Votron said, "We have appreciated their support, especially with regard to the financing aspects."

Chairman Maurice Lippens accepted that the acquisition was expensive but had many advantages. He said, "Joining forces with ABN has a lot of advantages but, of course, it has a price. The €24bn that Fortis is putting on the table is a very high amount of money. Quality has its price."

The only obstacle for the consortium now remains an approval from the Dutch-banking regulator.

After the vote, Fortis shares, already weak by 1 per cent in early trading, slipped lower about 1.8 percent at 27.97 euros while ABN shares climbed 1.5 per cent to 35.58 euros.