August 10, 2007 / 1:58 PM / 10 years ago

RBS investors back ABN deal

<p>Customers use the ATM machines of the ABN-AMRO Bank in Amstelveen, May 29, 2007. Royal Bank of Scotland shareholders overwhelmingly approved the proposed 71 billion euro ($97.2 billion) takeover of ABN AMRO on Friday.Koen van Weel (NETHERLANDS)</p>

EDINBURGH (Reuters) - Royal Bank of Scotland shareholders overwhelmingly approved the proposed 71 billion euro ($97.2 billion) takeover of ABN AMRO on Friday, the third and final leg of backing from investors in the RBS-led consortium.

The deal was approved against a backdrop of steep falls in the share price of banks around the world as worries about exposure to U.S. subprime housing market troubles and a turbulent credit market deepened.

Fortis, the Belgian-Dutch member of the consortium, dismissed speculation the turbulence would make it difficult to finance its part of the deal, however. The talk had helped knock ABN's shares more than 10 percent lower at one point.

"We are very comfortable about our financing. We have always been comfortable about the financing, and there's no reason why we should not be today," Fortis Chief Executive Jean-Paul Votron told a news conference after the vote.

"We are used to rumors about Fortis in all kinds of categories, so I would add this into the category of new rumor," he said. "The markets are a little shaky and a little volatile."

The offer from the consortium, which also includes Spain's Santander, is mostly in shares and is currently worth about 8 billion euros more than a rival, mostly shares offer by Britain's Barclays.

Either deal would be the biggest bank takeover.

RBS said it is confident ABN does not have any major exposure to the current credit market or subprime problems.

"We believe ABN is a very responsibly run bank and we have no reason to believe they have any undue exposure," RBS Chairman Tom McKillop said in answer to a shareholder question about whether ABN was exposed to troubled parts of the credit market.

RBS Chief Executive Fred Goodwin also downplayed the impact of the market turbulence on the offer.

"The market can move very quickly in either direction, so we'll pay careful attention as we move forward but we're happy with where we are today with our offer," Goodwin said.

ABN shares closed down 3.5 percent at 33.85 euros, well below the 38 euros per share value of the consortium's offer.

Shares in RBS, Fortis and Santander each shed 3 to 4 percent and Barclays tumbled more than 6 percent.

OVERWHELMING SUPPORT

The bid for ABN was approved by 94.5 percent of RBS shareholders who voted, well above the 50 percent needed.

RBS shareholders follow their counterparts at Santander and Fortis in approving the deal.

The consortium is considered a strong favorite to win ABN after an acrimonious battle.

Barclays is pinning its hopes on a recovery in its stock price in the next two months, but the value of its offer has fallen sharply alongside the equity market fall. It declined to comment on speculation on Friday it could withdraw its offer, but analysts downplayed the likelihood of this.

The offers from both the consortium and Barclays are now open for ABN investors to accept, until the first week of October.

ABN will hold an "informative EGM" of shareholders to discuss the two offers on September 20.

Goodwin said the consortium was having an "ongoing dialogue" with ABN after the Dutch bank switched to a neutral stance last week having previously backing Barclays' offer.

Under the consortium's proposal, RBS would get ABN's wholesale and investment banking unit and its Asian businesses, which it said will accelerate its growth plans in those areas.

It will pay 16 billion euros for the assets, including about 5 billion euros in new RBS shares.

Santander would get ABN's Italian bank Antonveneta and its Brazilian bank and Fortis would get ABN's Dutch retail operation and also its wealth and asset-management business.

Fortis's Votron said rumors that ABN staff and clients had left during the takeover battle were unsubstantiated. "As far as staff and clients are concerned we don't think this is a situation to be concerned about at all," he said.

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