RBS to offer branch disposals to evade referral
Friday 03 December 1999
The OFT earlier this week announced it was giving itself until 29 December to decide whether to recommend a reference. RBS's advisers believe that John Bridgeman, the director general of fair trading, asked for the 15 working-day extension in order to study more closely whether the density of the combined businesses raised competition concerns.
In the North-west of England, the two banks combined would have a high proportion of small and medium-sized business lending. However, this might be addressed through branch disposals and the transfer of this lending to another bank.
Stephen Byers, the Secretary of State for Trade and Industry, made reference to the fact that there were no overlapping branches between NatWest and Bank of Scotland in his statement giving Bank of Scotland clearance for its rival NatWest bid last Thursday.
NatWest is understood to have demanded more than pounds 17.50 a share from the Royal Bank of Scotland in talks last weekend as the price of board recommendation, way above RBS's initial pounds 15.60 a share offered, based on last Friday's RBS closing price of pounds 13.28. The precise terms demanded by NatWest's advisers were one RBS share and pounds 4.50 in cash for each NatWest share.
Terry Eccles of JP Morgan, adviser to NatWest, said that RBS shares would fall on Monday once the bid became public, devaluing a mainly share bid.
However, RBS's advisers, Merrill Lynch and Goldman Sachs were adamant that RBS's shares would rise on Monday. They were also hamstrung by the fact that the RBS was not authorised by its partners - BSCH, the Spanish banking giant, and CGU, the insurance group - to go much beyond the initial offer. On Monday RBS tabled a bid of 0.968 shares plus 305p in loan notes, only marginally above its starting point on Friday night of 0.95 shares and pounds 3.
NatWest's advisers were proved right. RBS shares have fallen by nearly 10 per cent while Bank of Scotland has risen - so its offer is now worth considerably more than RBS's.
Merger arbitrageurs and propriatory trading desks have decided to sell what they believe will be the eventual winner. "At some point this will inverse when people realise that with Bank of Scotland's offer worth more than pounds 1 more than RBS, there is a danger it might win," one trader said yesterday.
As Voltaire once said, “Ice cream is exquisite. What a pity it isn’t illegal”
- 1 Mother fed her daughter tapeworms to make her skinny for beauty pageant
- 2 Crystal Palace next manager latest: Palace consider Ally McCoist - EXCLUSIVE
- 3 Richard Dawkins on babies with Down Syndrome: 'Abort it and try again – it would be immoral to bring it into the world'
- 4 ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
- 5 Tim Sherwood column: 'It started as a three-horse race but turned into the Grand National'
'Alien thigh bone' on Mars: Excitement from alien hunters at 'evidence' of extraterrestrial life
West poised to join forces with Assad in face of Islamic State
Pamela Anderson rejects ice bucket challenge because of ALS experiments on animals: 'Mice had holes drilled into their skulls'
James Foley 'beheaded': Isis video shows militant with British accent 'execute US journalist' – as hunt begins for killer
ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
Richard Dawkins on babies with Down Syndrome: 'Abort it and try again – it would be immoral to bring it into the world'
Scottish independence: English people overwhelmingly want Scotland to stay in the UK
Isis threat: Cameron wants an alliance with Iran
Michael Brown shooting: Chaos erupts on the streets of Ferguson after autopsy shows teenager was shot six times – twice in the head
Disgusting, frustrating, but intriguing: how the country really feels about its politicians
Bin bag full of cats' heads discovered near Manchester's Curry Mile
iJobs Money & Business
£50000 - £60000 per annum: Harrington Starr: Network Engineer - CCNP, Hedge Fu...
£60000 - £70000 per annum: Harrington Starr: Senior Network Engineer-CCIE, Mul...
£30000 - £50000 per annum: Harrington Starr: Network Infrastructure Engineer (...
£35000 - £45000 per annum: Harrington Starr: Network Engineer (CCNP, BGP, Mult...