Nick Hasell: Analysis
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To the FTSE 100’s roster of Anglo-Dutch ventures – Royal Dutch Shell, Unilever, Reckitt Benckiser and Reed Elsevier – another unwieldy name could soon be added: Barclays ABN Amro.
Although such a tie-up has been mooted on and off for the past six years, much of the credit, should it happen, must go to The Children’s Investment Fund (TCI), the London-based activist hedge fund that has effectively forced the Dutch bank to the altar. In a letter last month to Arthur Martinez and Rijkman Groenink, ABN Amro’s chairman and chief executive, TCI submitted five resolutions that it wants tabled at the bank’s annual meeting on April 26.
The most radical was the call from Christopher Hohn, TCI’s founder, for the bank to put itself up for sale.
TCI’s shareholding may be small – it has a stake of about 1 per cent – but its demands have rallied other disgruntled investors, including Toscafund, the hedge fund run by Martin Hughes, a former Crédit Lyonnais banks analyst, which is also thought to have a 1 per cent stake in Prudential.
In response, ABN Amro has drafted in three investment banks – Lehman Brothers, Morgan Stanley and UBS – to advise on its defence. Speculation of bid interest recently has driven the bank’s shares to a six-year high. However, they have underperformed the European banks index by 40 per cent since 2000.
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