Company Of The Week: Bank of Scotland
Sunday 28 November 1999
Stephen Byers, the Secretary of State for Trade and Industry, said the BoS bid, the biggest ever in British banking, won't be referred to the Competition Commission. BoS made its initial offer two months ago, promising to squeeze savings and to better manage Britain's third-largest bank. The bank "can run NatWest better, improve its performance, and transform its future profitability," said BoS governor, Sir John Shaw.
"We have noted the increased offer and we'll respond at the appropriate time," said Steve Colton, a NatWest spokesman.
BoS has said it plans to sell NatWest's Ulster Bank, Gartmore Fund Management and Greenwich NatWest, distributing proceeds as a special dividend to up the offer to pounds 27.6bn or 1,652p a NatWest share.
Royal Bank of Scotland, a neighbour and larger rival of BoS, has told the Government it's considering a bid for NatWest, and on 6 December regulators will announce if such a proposal would be referred to the Competition Commission.
Under chief executive Peter Burt, BoS has expanded its retail network in the UK and Australia, and moved into continental Europe and Ireland.
BoS said it first approached NatWest about a possible offer at the end of 1997. It also held takeover talks that year with Barclays shortly after the resignation of the Barclays chief executive, Martin Taylor.
While BoS doubled its profit in the last five years by focusing on its main business, NatWest's earnings fluctuated as it expanded into new areas and disposed of units such as NatWest Markets, an investment bank, and its US retail banking operations which were sold in 1996 to Fleet Financial Group at a loss.
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