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Barclays ABN Amro Bid Seeks Cash from China and Singapore State Investors

Companies / Mergers & Acquisitions Jul 22, 2007 - 11:23 PM GMT

By: Phillipa_Green

Companies

Barclays ABN Amro Bid Seeks Cash from China and Singapore State InvestorsBarclays revealed earlier today that it was seeking to issue new shares to China and Singapore state investors worth £10 billion in cash, so as to enable Barclays to increase its offer for the dutch bank ABN Amro and thus beating the rival bid lead by RBS Bank.


According to the BBC, If the bid succeeded then China would hold 7% of the new group (including ABN Amro) and a smaller 3% for Singapore. The BBC also that said the two Asian governments would pay around 740 pence for each new Barclays share, which is 3.7 percent above Friday's closing price of 713.5 pence. The deal was arranged by the private equity firm Blackstone which in May this year sold a $3 billion stake in itself to the Chinese state.

A full announcement of the increased offer by Barclays will follow on Monday.

The interest by cash rich Asian goverments is a sign of especially China increasingly looking to invest much of its $ trillion plus currency reserves in investments other than US Treasury Bonds, and thus likely to result in increasing pressure on both the US Dollar and US interest rates.

However any seasonal weakness in the stock markets could be viewed as buying opportunities given the large amount of capital that is destined to be plowed into large cap stocks such as the major banks.

By Phillipa Green

(c) MarketOracle.co.uk 2005-2007

The Market Oracle is a FREE Daily Financial Markets Forecasting & Analysis online publication. We present in-depth analysis from over 100 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk


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