BoS condemns 'illusion of change' at NatWest

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THE BANK of Scotland yesterday hit back at NatWest's defence against its £22bn hostile bid for the clearing bank claiming it was a "weak response which does nothing to change the compelling logic of the BoS offer".

THE BANK of Scotland yesterday hit back at NatWest's defence against its £22bn hostile bid for the clearing bank claiming it was a "weak response which does nothing to change the compelling logic of the BoS offer".

Peter Burt, the chief executive, said that NatWest had "conceded key elements of the Bank of Scotland proposals, including the divestment of non-core activities identified by the Bank of Scotland".

"Shareholders will not be hoodwinked by the illusion of change - where the same people only weeks ago were arguing for the value-destroying Legal & General acquisition," he said.

Mr Burt rejected NatWest's claims that BoS lacks management, arguing that 23.5 per cent of its UK bank staff hold professional banking qualifications compared with 4.7 per cent at NatWest. He dismissed NatWest's argument that BoS had not cuts costs. BoS, he said, had cut its branch network by 16 per cent since 1994 and staff numbers by 15.4 per cent.

BoS, he said, had identified a hit squad of 70 senior managers to go into NatWest. They will be divided into 20 teams who will be charged with "unlocking the latent talent of NatWest's junior and middle managers".

Sir David Rowland, NatWest's chairman, said Mr Burt's comments "smacked of panic" and showed that the bank's criticism of BoS had "hit home."

Buyers have started, meanwhile, to emerge for the parts of the business which NatWest said it intends to sell.

Irish Life has expressed interest in Ulster Bank and last night appointed the investment banks DLJ and Schroders to advise it on its bid. CinVen is believed to be interested in NatWest Equity Partners, although the firm may be pipped by a management buy out.

Paul Myners, the executive chairman of Gartmore, the fund management group whose sale is being handled by DLJ, has said he is looking for a foreign buyer who would be prepared to give the existing management significant autonomy. Greenwich NatWest is thought to be likely to prove harder to sell. The firms founders Chip Kruger and Gary Holloway are not believed to be a in a position to buy the firm out themselves although they may push for a buyer who would leave them with a substantial equity interest.

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