Monday, September 27, 1999 Published at 11:56 GMT 12:56 UK
Business: The Company File
Royal Bank confirms NatWest interest
NatWest faces bids from RBS and the Bank of Scotland
The Royal Bank of Scotland has given a clear hint that it is considering making a bid for NatWest.
Referring to the rival Bank of Scotland's £20.85bn takeover offer for NatWest it added that it was "watching the situation" closely.
One of its rivals may be HSBC, owner of the Midland Bank, which became the latest UK bank to join the list of potential suitors for the NatWest Bank.
The Royal Bank of Scotland (RBS) has been reported to have been seeking approval from the NatWest board for its own £25bn counter offer.
Some reports say that RBS had originally planned a joint bid with Bank of Scotland, but discussions between the two banks broke down a few weeks ago.
Other hats reportedly close to being thrown in the ring include Abbey National - and European candidates such as France's Societe Generale and the Dutch bank ING Barings.
Branches under threat
NatWest has recruited US bank Goldman Sachs to help it find a white knight to fight the hostile bid from the Bank of Scotland(BoS).
NatWest, the UK's third biggest bank, said it did not feel the offer reflected its true value. In a statement, it said the bid was "unsolicited, unwelcome and ill thought-out."
BoS said NatWest would remain a separate unit, retaining its name.
But it would reduce by 50% the combined group's 2050 branches - made up of 1,730 NatWest and 320 Bank of Scotland branches.
Ed Sweeny, of banking union Unifi, said he feared this would mean branch closures and job losses running into "thousands, not hundreds".
He said it would inevitably lead to cuts in the branch network.
The offer would be conditional on NatWest's proposed takeover of Legal and General not proceeding.
Banks to be sold
BoS said it would sell off non-core NatWest businesses.
These are expected to include Gartmore, Ulster Bank and Greenwich NatWest.
Sir John Shaw, governor of Bank of Scotland, said the takeover would benefit NatWest, which he said had been underachieving.
Sir John said: "Bank of Scotland has been evaluating the benefits of a combination with NatWest for a considerable time and had initial discussions with NatWest last year.
"These discussions failed to produce agreement.
"NatWest, through its recent offer for Legal & General, appears to be pursuing the bancassurance model, untested in the UK.
"We continue to believe more value could be created for shareholders through a concerted effort to eliminate costs within the NatWest banking business."
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