Overview: ABN takeover battle puts top FDs on edge

It is the bid battle of the year. ABN Amro, the Dutch bank, is mulling not
one but two takeover bids, one of which values the group at more than 71bn euros
(£48bn).

In the midst of the EGMs, the late night discussions with advisers and the
investor roadshows are seven different finance directors and CFOs, all hoping to
emerge from the process with their reputations intact.

What’s happened?

Barclays led the way with the bidding for ABN after hedge funds started to
cause trouble at the Dutch bank. And though the battle began with Barclays
getting the support of ABN, it has now lost that, after an RBS-led consortium
trumped Barclays’s initial bid with a mostly cash offer. Barclays’s offer is
mostly shares and looks vulnerable in falling stock markets.

As far as the CFOs are concerned, the first casualty has been Hugh
Scott-Barrett, the former British FD of ABN. With the change of ownership
imminent, he is looking at other options already, leaving earlier this month.

What’s going to happen?

The CFOs at all the major players face an interesting few months as the bids
unwind.

Consortium member Fortis’s CFO Gilbert Mittler was thought to have the
biggest challenge, having to raise 13bn euros in a rights issue, around a third
of its market cap. It passed with 95% of shareholder support.

RBS FD Guy Whittaker and his counterpart at Santander, Jose Antonio Alvarez,
have secured the same support, but without the same fears Fortis had about hedge
funds scuppering the deal.

The challenge for Barclays now looks the steepest, but it has already scored
some palpable hits. Its groundbreaking deal securing finance from Chinese banks
will at the very least give it an introduction to one of the biggest markets in
the world.

The recently appointed CFO Chris Lucas could find himself with twice the job
he accepted if Barclays win. And lurking behind the scenes and working with the
board is former Barclays CFO Naguib Kheraj, who quit his job to get back into
dealmaking.

Whoever wins faces the unenviable task of finding synergies within the new
structures, and under the consortium deal, a carve-up is inevitable, and job
cuts likely.

There are meetings scheduled throughout September, with the key ABN vote in
early October. It will be make or break time for some of the biggest FDs in
European banking.