According to Reuters, the head of ABN Amro (ABN) says that he prefers the bid by Barclays (BCS) over one from Royal Bank of Scotland. The RBS bid is higher and ABN’s CEO says that it is still likely to prevail, unless Barclays will raise its figure.
But, he may be right in his preference. RBS would break the big bank into a number of pieces. Fellow bidders Santander and Fortis would take the parts that they think mesh best with their operations and RBS would keep the balance.
Breaking ABN into pieces almost certainly carries a great deal of execution risk, and a number of jobs would be eliminated. If the RBS program does not work, it could hurt investors in all three of the companies involved with the higher bid.
Damaging three financial institutions in not better than damaging one.
Douglas A. McIntyre