Sir Bruce, who retired in May last year, said that those who claim he would never have sanctioned such a risky undertaking are "making mischief". "It was I who made the original approach to Bob [Lord] Alexander [then NatWest chairman]. Bank of Scotland has been tracking the situation very carefully for 20 months," he told The Independent yesterday. "I am totally supportive of what Peter Burt and Jack Shaw [the BoS chairman] are trying to do."
Although, when the initial approach was made in 1997, it was to see whether there was any common ground for an agreed deal, the circumstances had changed. The Bank of Scotland's hostile bid for NatWest was precipitated by the decision of Sir David Rowland, the new NatWest chairman, to launch an agreed takeover for Legal & General, the life insurance group.
The Bank of Scotland now finds itself locked in a three-way bid battle with its arch-rival RBS.
"It was the inevitable consequence of the misconceived move for L&G which was a repetition of past mistakes. Taking the ball away from [Sir David's] feet was bound to create hostility." Sir Bruce believes the hostility is mainly on the part of the head office team at NatWest's City headquarters but was not shared by senior middle management and below.
The Bank of Scotland, which is looking in a stronger position than expected after RBS formally entered the fray on Monday, is understood to be discussing with its advisers about bring forward the pounds 1.20 special dividend it has promised to pay out next year from some of the disposal proceeds. RBS is already under pressure to top up its bid for NatWest after seeing its shares fall 10 per cent since it launched its offer on Monday morning. The RBS offer was worth pounds 14.78 yesterday, 151p below the headline value of pounds 16.30 of the Bank of Scotland, a premium of 12.5 per cent to NatWest.
NatWest said it would call off its pounds 1bn share buy-back if the Royal Bank posts its takeover document as expected next week. The Office of Fair Trading decided yesterday to postpone its decision on whether to refer the bid to the Competition Commission until 29 December, 15 working days after the original deadline of 6 December.
Outlook, page 21