Royal Bank courts a high-priced Sovereign
Sunday 02 November 2003
Royal Bank of Scotland has had a $7.5bn (£4.4bn) bid approach for Pennsylvania's second largest bank, Sovereign Bancorp, rejected.
The Philadelphia-based savings and loans bank is holding out for $9bn; its case has been strengthened by Bank of America's $47bn deal to buy a New England bank, FleetBoston Financial, which was announced last Monday. Royal Bank, which has an extensive banking network in the north-eastern United States through Citizens Financial, has been stalking Sovereign for some months.
Its attentions have been welcomed by the bank, whose chairman, Jay Sidhu, has publicly stated that it would be on sale for the right price.
It is understood that Royal Bank offered $25 a share for Sovereign, valuing the bank at around $7.5bn. However, Mr Sidhu is holding out for $9bn, a price that Royal Bank shareholders might find difficult to swallow. Bid speculation in the US has driven Sovereign shares up from a low of $12.6 last February to Friday's close of $20.81.
Royal Bank refused to be drawn on bid speculation but its chief executive, Fred Goodwin, has made no secret of the fact that he is on the hunt for a large deal and is interested in Sovereign.
Having bought NatWest three years ago for £21bn, Royal Bank has continued to be acquisitive. In the last year it has spent £3.4bn on deals ranging from Churchill Insurance in the UK to Mellon Bancorp in the US.
The Mellon deal extended the reach of Citizens from its New England base and has been highly successful. Citizens is now the second largest bank in the region, after FleetBoston.
Sovereign has $41bn of assets and 525 branches in Pennsylvania, Connecticut, New Hampshire, New Jersey and New York State. In its home town of Philadelphia, Royal Bank's Citizens has established itself by sponsoring the stadium where the local Phillies baseball team plays.
- 3 Russian girl takes her own life after parents find pornography on her computer
- 4 Ball pool for adults opens in London
- 5 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
Michelle Obama highlights harsh restrictions faced by Saudi women after meeting King Salman without wearing a headscarf
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Kim Kardashian on Bruce Jenner's 'story': 'We support him no matter what, and I think when the time is right, he'll talk'
Russian girl takes her own life after parents find pornography on her computer
Ball pool for adults opens in London
9 reasons Greece's experiment with the radical left is doomed to failure
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...