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Last Updated: Monday, 30 July 2007, 06:43 GMT 07:43 UK
ABN ends backing for Barclays bid
Barclays bank branch in Croydon
Barclays' bid for ABN Amro is part funded by Chinese investment
Dutch bank ABN Amro has withdrawn its formal support for Barclays' 67.5bn euros (45.4bn) takeover bid.

ABN Amro said it would not recommend either the Barclays bid or a rival 71bn euros offer from a group led by the Royal Bank of Scotland to investors.

It said it would ensure "a level playing field" between the bidders.

The move is a blow to Barclays whose previous support from ABN's board was seen as a crucial factor in helping it to overcome the higher RBS bid.

Barclays shares were virtually unchanged in late afternoon trading in London

Vying for control

Barclays recently secured backing for its bid from the China Development Bank and Singapore investment firm Temasek which enabled it to increase the amount of cash it was prepared to offer to ABN shareholders.

John Varley, Barclays chief executive
We recognise, at the current time, it is difficult for ABN Amro to make a clear recommendation to their shareholders
John Varley, Barclays

The RBS group - which includes Belgian bank Fortis and Spain's Banco Santander - also recently sweetened its offer for ABN as the two bidders vied to win control of the bank.

Barclays had made its bid conditional on gaining the support of ABN's board but it has now changed its stance, saying their support would merely be needed to complete the deal.

Barclays said it still believed its offer would prove attractive to ABN shareholders.

"We recognise that, at the current time, it is difficult for the boards of ABN Amro to make a clear recommendation to their shareholders," said chief executive John Varley.

"However, we are pleased to have their continuing support and we are confident that our revised offer delivers the value, stakeholder benefits and certainty that will allow the boards to support a recommendation in due course."

In a statement, ABN said it was not "currently" able to recommend either of the bids.

It said it would "further engage with both parties with the aim of continuing to ensure a level playing field and minimising any of the uncertainties currently associated with the offers with a view to optimising the attractive alternatives available to shareholders".

The bid battle to create one of the world's largest banks is set to last for many months as both parties seek to overcome regulatory obstacles and win over their own shareholders as well as ABN investors.




SEE ALSO
Chinese cash fuels Barclays bid
23 Jul 07 |  Business
RBS sweetens offer for ABN Amro
16 Jul 07 |  Business
Court approves ABN's LaSalle sale
13 Jul 07 |  Business

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