Page 433 - The Case Lab Book

He added: "The gap between our offer and Barclays was almost exactly the same as the day we launched the bid all
those months ago."

exceeded only by its £21bn purchase of National Westminster in 2000.

Royal's shares closed at 674.5p on April 13 this year - just before the bank confirmed it was involved in a consortium
bid for ABN. They closed last night at 559p 10 Oct 2007.

As well as the general downward pressure on the share price of any company which is to issue shares to fund a big
takeover, UK banking stocks as a whole have been hit hard by the global credit market crisis. This crisis, which
started with massive default by those US homeowners with poorer credit ratings served by the sub-prime mortgage
sector, eventually triggered a run on UK bank Northern Rock.

Asked by The Herald if he was happy with Royal's share-price performance, under the circumstances, Goodwin
replied: "The share price has held up very well through a very difficult time in the market for financial stocks. I would
like to, and fully intend to, see our share price considerably higher than where it is today."

Goodwin declared "cash is always king" and noted it was "even more fortuitous" in this instance given the unforeseen
hit on banking stocks from the credit crisis.

He insisted, meanwhile, that the ultimate success of the ABN deal was not dependent on a recovery of capital
markets from recent turbulence.

Goodwin said: "A lot of the businesses we are acquiring are about doing day-to-day transactions for businesses and
are not as highly leveraged to capital markets as you might think."

Under the consortium's original bid, Royal would have taken ABN's US subsidiary, LaSalle. However, in what was
viewed widely as a poison pill deal aimed at warding off the consortium and aiding Barclays, ABN agreed to sell
LaSalle to Bank of America for $21bn. After a lengthy Dutch court battle, following a challenge to this deal mounted
by ABN investors, the sale of LaSalle to Bank of America was allowed to go ahead. Goodwin said yesterday: "The
transaction stands up strongly without LaSalle. It is a pity we didn't get LaSalle. It really feels like ancient history now.
It is no use crying over spilt milk."

Barclay

Barclays was expected to keep the bank largely intact.

Nevertheless, the failure to pull off the deal - Europe's largest banking takeover - will
inevitably raise question marks about Barclays' future.

The loss of the bid has been both good and bad news for Barclays. On the one hand it cuts short
the growth it hoped to achieve through the acquisition, including in emerging markets such as
Brazil. The very public airing of differences between shareholders and management has also hurt
the reputation of Barclays' Chief Executive John Varley.

At the same time, Barclays shareholders have voiced their concerns about taking on a massive
bank that was less profitable than their own. Chen said that while Barclays offers a 12% return
on investment, ABN Amro offers only 9.0%.