The bid, if successful, would create the UK's third largest bank with eight million customers and 2,000 branches. But there were fears that up to 16,000 NatWest jobs could be lost.
Bank of Scotland is a third of the size of NatWest in terms of assets and employees, and half its size by value. But the David and Goliath contest electrified the City. NatWest shares rose by 30 per cent, prompting speculation that a rival bidder would emerge. Royal Bank of Scotland, which had been plotting a bid for Barclays, said it was watching the situation closely.
Bank of Scotland's hostile bid threatens to scupper the friendly offer by NatWest for the life assurance group Legal & General. Peter Burt, the Bank of Scotland chief executive, urged NatWest shareholders to reject the L& G deal and accept the rival offer, which would leave them with 68 per cent of shares in the enlarged bank. Last night NatWest rejected the bid as "unsolicited, unwelcome and ill-thought out". But it has had to adjourn a shareholders' meeting planned for next month to approve the L&G deal.
Mr Burt denied that there would be "tens of thousands of job losses" or that half NatWest's 1,750 branches would be closed. But he did warn of a three-year freeze on hiring and criticised NatWest's track record, strategy and top management.Reuse content