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Bidders line up for NatWest
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November 8, 1999: 10:35 a.m. ET
Royal Bank of Scotland indicates interest in beleaguered U.K. bank
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LONDON (CNNfn) - The battle for control of National Westminster Bank heated up Monday as rival Royal Bank of Scotland indicated it is considering making an offer for Britain's third-largest bank.
Bank of Scotland (BSCT) in September launched a £21 billion ($35 billion) takeover bid for NatWest (NWB), but that offer is under review by the U.K.'s antitrust watchdog.
Royal Bank (RBOS), signaling it may try to outmaneuver its Scottish rival, notified Britain's Office of Fair Trading (OFT) that it is contemplating a bid, although it stressed it would not necessarily make a move for NatWest.
Since Bank of Scotland opened the bidding for NatWest, Britain's third-largest bank in terms of assets, analysts have expected Royal Bank to make its own assault on the same institution. Its expression of interest, though, was enough to force NatWest stock up 2 percent Monday to 1,470 pence. Royal Bank of Scotland shares eased 2 pence to 1,402.
Press reports have suggested RBS is negotiating with Spain's largest bank, Banco Santander Central Hispano (BSCH), about joining forces for an assault on NatWest. BSCH is RBS' largest investor, with a nearly 10 percent holding. The New York Times reported Monday that the two could bid up to $42 billion for NatWest to trump Bank of Scotland's offer. The newspaper reported that BSCH would own around 30 percent of NatWest if the proposed deal goes through.
The OFT gives guidance to Trade and Industry Secretary Ian Byers on whether mergers should be referred to the Competition Commission. The OFT is currently studying Bank of Scotland's bid, and should give its recommendation within a week on whether a more comprehensive investigation is justified.
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