ABN Amro shares hit record highs on Monday, piling more pressure on talks between the Dutch bank and Barclays, of the UK, as they race to agree a merger within 48 hours while fending off a rival three-way proposal from a consortium led by Royal Bank of Scotland.
ABN Amro's share price surged more than 6 per cent to _35.76 as investors anticipated the possibility of a higher bid from the rival consortium and approved profit figures that were released ten days early. Barclays' shares also rose, trading 1.1 per cent higher at 751½p - off earlier highs.
The share movements increased the likelihood that the Dutch bank's board may be forced to recommend to shareholders a deal with Barclays that values the bank at less than its current share price.
That is is one reason why ABN Amro and Barclays are understood to have revived discussions on a deal that would include the possibility of a partial break-up of ABN Amro, with the Dutch bank's US retail banking operations a candidate for divestment. Such a move would release additional immediate value for shareholders.
The banks are understood to be working towards a merger announcement on Wednesday, when a period of exclusive talks with Barclays ends. However, it is unclear whether that goal will be achieved, with decisions awaited on some key issues including regulatory oversight.
Another outstanding issue involves the settlement of a US criminal investigation. The Dutch bank said on Monday it was "actively exploring all possible options" to resolve a US Department of Justice criminal inquiry into dollar clearing activities.