Royal Bank of Scotland gives formal notice of NatWest bid

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The Independent Online
ROYAL BANK of Scotland yesterday gave its first formal notice that it may bid for NatWest, the high street bank, posting a merger notice with regulators.

The disposal does not commit RBS to launching a strike for the clearing bank, but ensures that competition officials can consider the implications of Bank of Scotland's actual bid, and RBS's possible bid, at the same time.

"RBS has been considering the position of NatWest for some time and it is watching the situation as it develops," RBS said yesterday. "Consistent with this and to keep a full range of options open, RBS is submitting a Merger Notice to the Office of Fair Trading, in respect of a merger in contemplation with NatWest."

Previous statements from RBS confined it to monitoring the situation at NatWest, which is facing a hostile pounds 22bn bid from BoS, RBS's Scottish rival.

The OFT has up to 35 days to consider BoS and RBS submissions and advise Stephen Byers, the Secretary of State for Trade and Industry, whether the proposed tie-ups raise competition issues that require referral to the Competition Commission. If so, the 60-day timetable running on the BoS bid would be halted.

"By posting the Merger Notice, RBS stays on the same timetable as BoS," Tom Rayner, analyst at SG Securities, said. "It keeps the pressure up and keeps them in focus."

Last week, the Takeover Panel said RBS faced a 3 December deadline for the submission of a bid for NatWest. Debate has centred on the possible roles played by BSCH, the Spanish bank, and Italy's San Paolo IMI in any RBS bid. BSCH holds 10 per cent of RBS, while San Paolo-IMI has a cross- shareholding with BSCH.

Under the timetable of the BoS bid, NatWest has until 22 November to put forward any new information on its response. The final day for revisions by BoS is on 29 November. If RBS announced a bid on 3 December, it would have a maximum of 28 days to post details of its offer, after which a 60-day countdown would begin. NatWest ended 4p up at 1,446; RBS was 15p down at 1,389p; BoS gained 5p to 762p.

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