Bank of Scotland Escalates Attack on Royal Bank of Scotland in NatWest Bid Battle

In a recent move to gain an upper hand in the battle to acquire National Westminster Bank, Bank of Scotland chief executive Mr. Peter Burt has raised questions about Royal Bank of Scotland's relationship with CGU, a major insurer. The dispute centers on the issue of bancassurance ventures, with Bank of Scotland accusing Royal Bank of sacrificing shareholder value for short-term support from CGU. Royal Bank's links with CGU have been fully disclosed and accepted by the market, but Bank of Scotland is questioning the terms of their agreement.

Key Takeaways:

• Bank of Scotland has launched a series of questions about Royal Bank of Scotland's relationship with CGU, specifically regarding the terms of their bancassurance venture.
• The dispute centers on the issue of shareholder value, with Bank of Scotland accusing Royal Bank of sacrificing value for short-term support from CGU.
• Royal Bank of Scotland has denied any secret deal with CGU regarding the sale of NatWest's fund manager Gartmore.
• Bank of Scotland's bid for NatWest stands at £24.4 billion, including a special dividend, surpassing Royal Bank of Scotland's bid of £22.7 billion.
• CGU's agreement with Royal Bank has helped Royal Bank's shares outperform the banking sector by more than six per cent in the last three days, with CGU spending over £50 million in support of the share price.

Statistics:

• Royal Bank of Scotland's bid for NatWest: £22.7 billion
• Bank of Scotland's bid for NatWest: £24.4 billion (including a special dividend)
• CGU's spending on Royal Bank shares: over £50 million in the last three days
• Royal Bank's share price outperformance: over six per cent in the last three days compared to the banking sector

Sources:

• Bank of Scotland press statement to the London Stock Exchange
• Report on Royal Bank of Scotland's links with CGU (no attribution provided)