Royal Bank of Scotland Considers Counter-Bid for NatWest

The Royal Bank of Scotland is seriously considering a counter-bid for NatWest, a move that could create a bidding war between the two Scottish banks. A merger notice was submitted to the Office of Fair Trading, which must launch a counter offer by December 3. The Royal Bank's decision comes after weekend reports suggested it was in talks with Spanish bank BSCH about a joint bid for NatWest.

Key Takeaways:

• The Royal Bank of Scotland has submitted a merger notice to the Office of Fair Trading, indicating its intention to launch a counter-bid for NatWest.
• The Royal Bank has to launch a counter offer by December 3, outstripping the existing $13.30 share bid from Bank of Scotland for its much bigger rival.
• Banking analysts predict a 70-80% chance of the Royal Bank making a bid, with Schroders' banking analyst Mike Trippitt stating, "We see a 70-80% chance of the Royal Bank bidding."
• Lehman banking analyst Colin Hector notes, "This is mildly positive for NatWest shares, as it means the Royal Bank is keeping its hat in the ring."
• NatWest shares jumped 16p to $14.58 in early trading, while the Royal's shares rose 6p to $14.10.
• A banking insider suggests that a bidding war may break out, with the Royal deal potentially raising questions about a foreign bank's holding in a UK operation.
• The Bank of Scotland must decide whether to raise its hostile bid for NatWest to strengthen its position, potentially going as high as $17.60p a share.
• If the Royal enters the fray, the 60-day timetable for the Bank of Scotland's bid would lapse, replaced by a new one from the posting of the Royal's offer document.

Statistics:

• 16p
• $14.58
• 6p
• $14.10
• 70-80%
• $13.30
• $17.60
• $29bn
• 28 days
• 60 days
• 1%
• 3%
• 1.5%