NatWest chief lashes out at both Scottish bids

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The Independent Online

National Westminster Bank yesterday cast doubt on the ability of the Scottish banks to better the terms of their hostile bids as it posted to shareholders a twin-pronged rejection of takeover bids from both the Royal Bank of Scotland and the Bank of Scotland.

National Westminster Bank yesterday cast doubt on the ability of the Scottish banks to better the terms of their hostile bids as it posted to shareholders a twin-pronged rejection of takeover bids from both the Royal Bank of Scotland and the Bank of Scotland.

Dismissing the £22bn Royal Bank bid as "inadequate and risky", Sir David Rowland, the NatWest chairman, said he would look at any fresh proposals but doubted whether either could muster the resources for a convincing bid. He insisted that the bank, which had already rejected a £25bn hostile bid from Bank of Scotland, had plans for developing the business, including a £2bn share buyback and a 25 per cent increase in dividend for the 1999 year.

Sir David said: "The share prices of the Royal Bank of Scotland and the Bank of Scotland have recently fallen significantly. Their proposals also involve claimed merger benefits which are unrealistic based on precedent and a high risk of customer disruption and value loss."

The tone of yesterday's document and the fact that NatWest is now bracketing the Scottish banks together comes as a blow to the Royal Bank of Scotland. It had hoped the removal of the threat of a Competition Commission referral last week might pave the way to renewed talks on an agreed deal.

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