KEY POINTS:
Barclays' hopes of securing a merger with its Dutch rival ABN Amro took a huge leap forward yesterday after Citigroup in effect ruled itself out of a counter-bid by joining the British bank's team of advisers.
Citigroup - along with Royal Bank of Scotland and HSBC - has long been seen as one of the most likely counter-bidders for ABN, which is in exclusive talks with Barclays.
However, its internal procedures are understood to bar it from becoming involved in a deal where it is acting as adviser to one of the parties.
While this rule has been repeatedly broken by other investment banks, a volte face by Citigroup would still be hugely embarrassing and would reflect poorly on its chief executive Chuck Prince, who has made strenuous efforts to clean up the bank's tarnished image.
ABN chairman Arthur Martinez said yesterday in a letter to shareholders that he was "excited" about the potential of a deal with Barclays.
He also said shareholders would be able to vote on five motions put forward by the rebel shareholder TCI but attacked the hedge fund for focusing on "mere short-term cash generation".
TCI, run by Southampton University graduate Christopher Hohn, sought to raise the pressure on ABN, saying it had increased its stake from 1 per cent to 2 per cent. The hedge fund also threatened legal action if ABN refused to talk to potential partners other than Barclays.
- INDEPENDENT
