LONDON (CNNfn) - National Westminster Bank's plan to defend itself from the 21 billion pound ($35 billion) hostile bid by smaller rival Bank of Scotland drew immediate criticism Wednesday and sent its shares down more than 3 percent.
Analysts said the U.K. bank would have to try a lot harder if it wanted to remain independent.
David Rowland, chairman and chief executive of NatWest, underlined his intent to keep the bank independent, however, as he ruled out finding a "white knight" friendly suitor.
The contents of Natwest's defense document, published Wednesday, did little more than mirror the plans of its hostile suitor to dispose of non-core assets.
"The document contains virtually nothing that is new as far as I can see, apart from adding NatWest Equity Partners to the disposal list," Bob Yates, head of research at specialist financial brokers Fox-Pitt, Kelton, told CNNfn.com.
NatWest said it would sell non-core assets and return the proceeds to shareholders while cutting costs in its core businesses. The bank reiterated plans to cut 10,000 jobs first announced three years ago.
A separate statement immediately after the document was released, however, said the company would cut a further 1,650 jobs, including 1,000 of its 3,000 support staff at its head office and the others from its Lombard asset finance business. NatWest presented this as "part of its ongoing strategy to reduce costs and improve profitability."
In its defense plan, NatWest said it would focus on its three core areas of retail, business and private banking customers and would cut the number of its business units to five from 13.
It plans to match Bank of Scotland's intention to dispose of fund management arm Gartmore, investment bank Greenwich NatWest and its Northern Ireland unit Ulster Bank. The bank also added its venture capital unit NatWest Equity Partners to the list.
Analysts were disappointed that Natwest's defense contained little that was new. "In this form it is an absolutely inconsequential document. I am disappointed, yes, but if I think about it more material is likely to emerge later. Maybe they are just keeping their powder dry," Yates said.
The market reacted with dismay and marked Natwest's shares down 3 percent in morning trade in London at 1,368 pence. The price is still well above Bank of Scotland's current bid price of 1,254 pence, however, and analysts said at least one rival bidder was still likely to emerge.
"This defense certainly doesn't reduce the possibility of counter bids," Yates said, adding that the Royal Bank of Scotland was his "front runner." Abbey National is seen as another favorite to make a possible bid.
But Natwest's Rowland said he was not looking for a friendly suitor to rescue the bank, nor had he received any other approaches.
"We're not looking for a white knight . . . If somebody else comes along, we'll listen to what they'll say, but it hasn't happened yet," Rowland said.
Royal Bank's shares were down 2.5 percent in London at 1,303 pence, while Abbey National's stock stood almost 1 percent lower at 1,121 pence.
Rowland attacked Bank of Scotland's bid and said it made unrealistic claims. "Bank of Scotland is attempting to hijack cost savings that belong to NatWest shareholders and is claiming unrealistic merger benefits. I urge NatWest shareholders to reject the offer which is ill-conceived and significantly undervalues NatWest," he said.
Analysts estimate that the planned asset disposals could raise up to 5 billion pounds and would value the bank's shares at 1,500 to 1,600 pence.
Bank of Scotland's shares were 0.5 percent higher in London at 719 pence.
-- from staff and wire reports