Barclays quits ABN race with parting shot

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The Independent Online

John Varley, Barclays' chief executive, took a final swipe at the Royal Bank of Scotland consortium yesterday, saying it had overpaid for ABN Amro as he admitted defeat in the battle for the Dutch bank.

Barclays bid first for ABN in April and won approval from the Dutch bank's board. But RBS and its partners gatecrashed the deal with a higher bid and have emerged as the winners. Yesterday Barclays withdrew its bid, which stood at ¿61.6bn (£42.7bn), about ¿9bn below the consortium's offer.

"I do think the consortium has overpaid. That is the only comment I will make on the point," Mr Varley said. "Would it have been right to have contemplated putting more money on the table? It would have been wrong to have done that."

Mr Varley added that the bid for ABN was agreed by the whole of Barclays' board and that he did not thinkhis job was in danger. "Ihave absolutely no intention of resigning," he said.

Barclays had mounted a campaign to get its share price up to match the consortium's offer but its share-based offer languished all summer as the credit crunch hit bank stocks, while the consortium's mostly cash offer held its value. Some think Mr Varley's accusation about overpaying is inconsistent with the attempt to drive up Barclays' shares to win, but Mr Varley said his bid had a "built-in hedge".

The battle with RBS and its partners, Santander of Spain and Fortis of Belgium, became increasingly bitter with mud-slinging on both sides. RBS declined to respond to Mr Varley's comments. RBS is expected to make a statement early next week once it has calculated the number of shares cast in support of its bid.

ABN Amro would have taken Barclays to its target of making about three-quarters of its profit outside the UK, compared with about 50 per cent now. It would also have gained Barclays' valuable banking licences in fast-growing emerging markets such as China, Pakistan and Indonesia.

Mr Varley said Barclays had plenty of options in countries such as India and South Africa to expand internationally without acquisitions, but that it would look at other deals.

He added that Barclays Capital, the investment banking business, would be quieter in the third and fourth quarters of this year but that it was still set to grow at about 15 to 20 per cent a year over the med-ium term.

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