Battle for NatWest resumes as DTI clears pounds 22bn Bank of Scotland bid
Friday 26 November 1999
Shares in NatWest soared 8.8 per cent to 1,471p following the decision, easing City fears that the Government, which last year launched a review of the banking sector, would use the bid battle as a pretext for a wider review of the banking sector.
The decision could clear the way both for a higher bid for NatWest by Bank of Scotland, and for Royal Bank of Scotland (RBS) to enter the fray, even though Stephen Byers, the Industry Secretary, has given himself another 11 days at least to rule separately on an RBS bid.
Under the revised 60-day bid timetable, which resumed at day 37 last night, NatWest has less than 48 hours to publish its final defence document. This, which could be out as early as today but will probably go out tomorrow, is likely to set a firm timetable for the pounds 5bn disposal programme and flesh out the bank's commitment to cut more jobs. It is also the last chance for NatWest to publish its profit forecast and pledge to return capital to shareholders.
Mr Byers said he had been advised by the Office of Fair Trading that the bid did not raise any competition concerns. "The banking sector is of central importance, both in its own right and for the economy as a whole... I am persuaded that the merger will not have any adverse effect on competition. The parties have branch networks that are concentrated in different areas of the country, and they face significant competition from other institutions over a range of their services," he said.
Mr Byers had not been expected to rule until next week, but is believed to have brought forward his decision as he is flies to Seattle today on official business. There was relief at Bank of Scotland, as a referral would have effectively halted its bid in its tracks. The bank, which has been exploring its options to raise finance, now has a week to prepare to increase its offer.
Mr Byers is still considering a request for clearance from RBS for a bid for NatWest. Analysts believe it is unlikely that this would be referred, although given the greater overlap between RBS's English branches and those of NatWest, a referral cannot be ruled out. The OFT is due to complete its deliberations on the RBS request by 6 December. Under the revised timetable RBS has until 8 December to declare its hand.
RBS is believed better placed to justify a price close to the 1,600p NatWest shareholders are believed to be seeking. Angel Cortesegui, chief executive of BSCH of Spain, said it would back an RBS bid for NatWest. "If Royal Bank decides to do something, we will support it. We will always act in Britain through Royal Bank and not directly. It is their decision," he said.
Tom Rayner, bank analyst at SG Securities, said he believed NatWest would now seek an agreed deal with RBS. "I don't think Sir David Rowland [NatWest chairman] wants to end his career spending 10 years trying to sort NatWest out. He just wants to get the best value for NatWest shareholders."
Earlier yesterday the heads of information technology at Bank of Scotland and NatWest clashed over the Scottish bank's claims to be able to save more than pounds 290m through eliminating IT duplication.
Outlook, page 23
- 1 Nokia no more: Microsoft drops once-ubiquitous mobile name – in favour of its Lumia brand
- 2 Renee Zellweger on plastic surgery reports: 'I'm living a fulfilling life and I'm thrilled that perhaps it shows'
- 3 Banksy not arrested: Internet duped by fake report claiming artist's identity revealed
- 4 Australian café owner sparks debate after saying 'No' to having unruly children on premises
- 5 Couple die within 28 hours of each other after being married for 73 years
Ottawa shooting: Canadian soldier dies after being shot at National War Memorial – with one gunman killed inside parliament
Renee Zellweger on plastic surgery reports: 'I'm living a fulfilling life and I'm thrilled that perhaps it shows'
Isis releases first video showing the stoning of woman accused of committing adultery as her father shouts 'don't call me Dad'
Banksy not arrested: Internet duped by fake report claiming artist's identity revealed
Diwali 2014: What is the festival of lights and how is it celebrated?
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
London bus driver 'kicks gay couple off for kissing'
iJobs Money & Business
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...
£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...
£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...