Page 9 - RBS TG

Issue 2

Did the recent credit crunch have an effect on the price
of the bids?

The collapse in Barclays' share price undermined its bid,

leaving it exposed to the consortium's higher cash-based
offer.

Barclays is keen to see its share price go higher over the

next month as shareholders deliberate between its bid and

that of a banking consortium led by Royal Bank of

Scotland, whose mostly cash offer was worth 71 billion

euros ($98 billion).

"While the Barclays merger proposal was understandable,

realistically implementable despite being expensive, the

consortium chopping of ABN Amro might eventually

become a structural nightmare."

The value of Barclays' offer fell with its share price this

summer amid widespread turmoil in the banking sector,
leaving it at a 10bn euro disadvantage to the RBS's mostly

cash offer.