Bloomberg News

Netherlands May Keep ABN Stake to Block Unwanted Takeovers

June 08, 2011

(Updates with minister’s comment in second paragraph.)

June 8 (Bloomberg) -- The Netherlands may retain a stake in ABN Amro Group NV, the lender nationalized in 2008, to block unwanted foreign takeovers following a possible return to the stock market.

“It’s conceivable” that the government ‘will hold on to a slice of 5 to 10 percent,” Finance Minister Jan Kees de Jager said in The Hague today. “Market experts tell me that even a 5 percent stake in the hands of a state that doesn’t favor a takeover has a big value-limiting effect on acquiring parties, which creates a threshold without us having to formalize one.”

De Jager repeated the state prefers to sell shares in ABN in parts through a stock-exchange listing, while all options remain open. A sale of a first tranche may take place in 2014 at the earliest, and is conditional upon a return of stability in the financial industry, he said.

The government bought Fortis’s Dutch banking and insurance units and its stake in ABN Amro Holding NV for 16.8 billion euros ($24.6 billion) in October 2008 after the company, which was renamed Ageas last year, ran out of short-term funding as customers withdrew deposits and investors lost confidence. Additional aid pushed the costs of the bailout to about 30 billion euros. The banking businesses were merged and separated from the insurance unit, now called ASR Nederland NV.

Protective Actions

De Jager reiterated today it will be difficult to recover all taxpayers’ money spent on the rescue of ABN and Fortis, while the state aims to get back as much as possible.

“I prefer ABN to remain a Dutch bank,” de Jager said. “Having one or two international banks that can serve national companies in their foreign activities is important for an economy” such as the Netherlands’, he said, adding that those banks don’t necessarily have to be state-owned.

The government hasn’t made a final decision on protective actions for ABN and hasn’t discussed retaining a small stake with the European Commission, de Jager said. Keeping shares with specific rights attached to them may encounter objections from the European regulator, he said, while without the additional rights there may not be an issue, he said.

The Netherlands isn’t considering a similar protective measure for ASR, De Jager said, adding no timetable can be given for a share sale even as the insurer is “on the right track” operationally.

--Editors: Stephen Taylor, Dylan Griffiths

To contact the reporter on this story: Maud van Gaal in Amsterdam at mvangaal@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net;


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