AMSTERDAM - ABN Amro's boards will not recommend either of the two rival takeover bids the Dutch bank has received, they told shareholders yesterday.
The Barclays PLC bid fits better with ABN's own corporate strategy, while the one from a consortium led by Royal Bank of Scotland PLC is worth more, but is risky, the company's managing board and supervisory board said in a statement.
Either takeover, if successful, would be the largest in the history of the financial industry.
ABN Amro Holding NV shareholders meet Thursday to discuss the Barclays bid, which expires Oct. 4, and the RBS offer, which ends a day later.
The boards said they "acknowledge that the consortium offer . . . is clearly superior for the ABN Amro shareholders from a financial point of view."
At Friday's closing prices, the mostly cash bid by RBS was worth $97.4 billion - 19 percent more than Barclays' mostly share bid.
However, ABN shares closed at $48.55, signaling investors still have doubts as to whether the RBS deal will prevail.
Chief executive Rijkman Groenink said the boards "could not be expected, as representatives of the company, to recommend the breakup of the bank."
Among the consortium, Fortis NV of Belgium wants ABN's Dutch operations, Banco Santander Central Hispano SA wants its Brazilian and Italian arms, and RBS wants the rest, including ABN's investment banking arm.
Barclays' proposed merger would largely leave ABN intact - except for its US arm, LaSalle Bank, which Groenink agreed to sell to Bank of America Corp. for $21 billion in what was widely seen as a poison-pill measure to frustrate the RBS-led group.
However, Groenink told Dutch state broadcaster NOS that "the chance is greatest that it is the consortium that reaches the finish line."
While Barclays' bid has passed all regulatory hurdles, the RBS bid awaits approval from EU competition authorities and a statement of "no objection" from Dutch financial authorities.
In addition, amid recent turmoil on credit markets, there is some question as to whether the consortium members could run into trouble arranging financing for their deal - even though all members have strong credit profiles and underwriting agreements are in place with prestigious financial management companies like Merrill Lynch & Co.