Barclays urged to drop ABN Amro takeover

A New York-based activist investor has called on British bank Barclays to drop its takeover of Dutch rival ABN Amro.

Atticus Capital, which holds a 1% stake in the UK bank, said it viewed the proposed £45bn (€66.35bn) deal as an offer to buy "an inferior business in an auction at inflated prices", adding that it would seek to lobby other investors.

In its June 1 letter to Barclays chairman Marcus Agius, Atticus's chairman Timothy Barakett said further efforts to buy ABN would "harm management's credibility and anger shareholders".

In response, Barclays told the Financial Times that the views expressed by Atticus were not representative of those it had received from shareholders, who it said remained supportive of its strategy.

Barclays will need the support of shareholders if it is required to improve its offer in the face of competition from a consortium led by Royal Bank of Scotland. RBS has already said it is prepared to trump Barclays with an offer worth £48.2bn (€71bn).

However, the rival bid is dependent on the ability of the consortium, which also includes Spain's Santander and Fortis of Belgium, to quash or amend a deal that ABN struck with Bank of America to sell US banking arm LaSalle. That decision is subject to a Dutch court ruling next month.

The Financial Times reported that Mr Agius and Bob Diamond, chief executive of Barclays Capital, met Atticus last week to try to persuade it of the merits of the deal.

However, the meeting is not thought to have changed the view of Atticus deputy chairman David Slager, who would like Barclays to invest in its "best in class" businesses or return cash to shareholders.

Barclays expects to publish its formal offer in July after it said recently that it was making "excellent progress" with the key regulatory filings required to proceed with the takeover.

There are 108 regulatory authorities in 53 countries with whom a change of control filing needs to be made. A change of control consent is required from 55 of these regulatory authorities to enable closing of the offer.

Barclays and ABN Amro are also at an advanced stage of preparing the various merger control filings.