You are in > manchester.com  > News > Asian investment boosts Barclays ABN Amro bid

Business

Asian investment boosts Barclays ABN Amro bid

23/07/2007

Billions of pounds worth of investment from the Far East has swelled Barclays' proposed takeover offer for Dutch bank ABN Amro.

The UK company has now submitted a revised offer of €67.5 billion (£45 billion) for ABN Amro, made up of €42.7 billion (£28.7 billion) in shares and €24.8 billion (£16.7 billion) in cash.

But the bid still falls short of a rival offer tabled from a consortium led by the Royal Bank of Scotland.

Barclays had been able to make its improved offer after receiving €13.4 billion (£9 billion) worth of investment from China Development Bank and the Singaporean government's investment outlet Temasek Holdings.

Under the terms of the deal both will become major shareholders in Barclays, with the state-run China Development Bank and Temasek taking 3.1 per cent and 2.1 per cent of shares in the UK bank.

John Varley, chief executive officer of Barclays, said today's announcement represented an "important new step" towards the firm's ambition of becoming one of the world's leading banks.

"Through the introduction of two highly-respected shareholders, from whom we will derive support and advice, we will be able to drive our future development in the rapidly growing Asian markets," he added.

China Development Bank's governor Chen Yuan, the only governor of a Chinese bank to also be a government minister, said the investment in Barclays was a "unique and compelling financial opportunity".

Simon Israel, executive director of Temasek, added: "We believe the Barclays board and management understand what it takes to make the merger with ABN Amro work and deliver value."

On the revised offer, which includes €2.5 billion (£1.7 billion) of conditional investment available for clawback targeted at existing Barclays shareholders, Mr Varley said it offered "greater flexibility for ABN Amro shareholders", who can now choose to be paid in either shares or cash.

© Adfero Ltd