Bid for NatWest heats up
The continuing takeover wrangle for British bank, National Westminster (Nat-West) is set to drag on with regulatory authorities putting a freeze on any ac-tion from two competitors.
The continuing takeover wrangle for British bank, National Westminster (Nat-West) is set to drag on with regulatory authorities putting a freeze on any ac-tion from two competitors.
The battle between the Bank of Scotland (BOS) and the Royal Bank of Scot-land (RBS) was due to be resolved by December 13, but the takeover panel froze the timetable until the British government has decided whether or not to refer the bid to the Competition Commission.
The Office of Fair Trading in the UK is currently examining both the BOS offer and a potential bid from RBS with a decision on a referral to the Competition Commission to be announced by December 3.
The Department of Trade and Industry is believed to be unlikely to refer the BOS bid on competition grounds alone as little overlap exists between BOS and NatWest. However a wider Competition Commission investigation of the banking industry may still occur.
Both competitors have a 60 day takeover timetable, now frozen, which will re-start when the decision is announced.
At this stage NatWest will only have a further 48 hours to make its final de-fence, day 39 in the timetable while BOS still has a week to decide on any increase in its bid, day 46.
RBS has yet to make clear whether it planned to bid at least 10 days before the BOS bid closes, which could be as late as December 26 under the fully allowed time limit.
This has put pressure on fund managers who were hoping to close or reduce trading over the Christmas and New Year period, leaving few trades to settle over the end of the year while their back offices will be preoccupied with the millennium date change.
The main concerns will be the drying up of liquidity while some fund managers are actively dealing in three large banking stocks right through December and early January period.
AUTHOR
Jason Spits
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