Saturday, July 21, 2007

Groenink strikes back

A fascinating interview with ABN Amro CEO Rijkman Groenink (see earlier post "hero or goat") in today's NRC Handelsblad, and a good scoop for the paper.

Unfortunately it's all in Dutch _ somebody would do the banking world a favor if they would translate it into English, but I couldn't do that here without violating fair use rules, I don't think.

Suffice it to say, he continues to prefer Barclays as a merger partner, despite the financially much better offer from the RBS consortium, which he views as hostile.

"The Consortium doesn't need to be concerned with us (management) at all, and it hasn't, right up to this moment. Even the discussion with the employees was done (over our heads) directly with the unions. I wouldn't call these negotiations, because they aren't: there's a un-asked-for and complete offer on the table, and we have nothing to say about it _ at most, we can say that we find some things unacceptable and that we'll make that public soon if we don't like it."


Here's a link to the AP writeup in the Herald Tribune
He also says in the interview that:

-the talks were "businesslike" and he wasn't directly involved (no surprise there; the board committee is handling talks from here on out).

-ABN 'has performed fine with respect to comparable European banks.'

(there's truth in that _ in terms of financial returns, but not share price, I think, and that's what turned the company into prey. One wonders: would Groenink not be trying to acquire Fortis if it were on the ropes?).

-the Supreme Court decision "completely supported us"

(again, there's obviously truth in that: the decision said they had the legal right to sell LaSalle. But he doesn't mention the advice of the Attorney General, which declined to comment on whether the sale was a good or fair decision from a shareholders' perspective).

-He makes a good point that there hasn't been nearly the protectionist outcry in the Netherlands about 'losing' the country's largest retail bank that you might hear in France or even the U.S.

Imagine in the U.S. if Bank of America Corp. were bought by a Japanese bank.

For some people, the lack of worry by even the country's Socialist Party should be a compliment to the Dutch capitalist trading nation spirit. In any event it's probably a bit disingenuous of Groenink to suggest that ABN will be destroyed in the Netherlands by an acquisition _ whether it's Barclays-ABN or Fortis-ABN, the core business in Holland (and each region) will survive largely intact.

-Finally, one thing that came as a surprise to me was an NRC assertion that many Dutch ABN employees actually prefer Fortis to Barclays as a partner. Groenink seems to agree, saying "of course in a merger some divisions aren't so thrilled with the new partner," and that it boils down to who's likely to lose jobs, which vary in each scenario.

For me, the 1+1=2 logic has always been that the Fortis merger will lead to layoffs in the Netherlands as they combine retail branch offices, but I've never seen an analyst report breaking it down, and Fortis says otherwise. And it's true that having the Barclays headquarters in Amsterdam would boost the city's standing as a financial center.

Well, we'll see if Barclays doesn't have a last ace up its sleeve before the game is over.

In all, good fun on a Saturday.

No comments: