Barclays Abandons Its ABN Amro Bid

123jump.com Staff
05 Oct, 2007
New York City

Most major European markets posted gains in their mid-day trading session. Leading the movers was the UK FTSE Index up 0.78%, followed by the German DAX gaining 0.61%. Ahead of the release of the U.S. jobs report, the major Asian markets closed mixed, with Japanese, New Zealand, Indian, South Korean and Taiwanese markets posting losses. Japan''''''''''''''''s Cabinet Office reported a steep decline of the leading index for Japan to 30 in August from 72.27 in July.

[R]8:00AM New York – Barclays abandons its offer from ABN Amro.[/R]

Barclays Plc withdrew its offer of cash and stock worth $84 billion for ABN Amro after only 80% shareholders were tendered.

The bid led by Royal Bank of Scotland from the consortium of three banks is now likely to split the bank in three divisions. The higher bid valued at 70.5 billion euros or $99 billion is not what the management of ABN Amro had preferred.

Barclays said that it is likely to ask for the breakup fee of 200 million euros.

The consortium of three banks led by RBS included Banco Santander Central Hispano of Spain and Fortis of the Netherlands.

[R]6:00AM New York, 6:00PM Tokyo - Casio leads Tokyo down 0.2%. Nikkei 225 up 1.7% for the week. Japan’s from exchange reserves hits record US$945 billion[/R]

In Tokyo trading Nikkei 225 closed 0.16% or 27.45 or 17,065.04 in the red, while the broader Topix index firmed 1.6%. The index was up1.7% for the week.

Of the Nikkei 225 stocks 92 gained, 119 declined and 14 were unchanged. Softbank Corporation led advancers, rising 5.36% after the Telecommunications Carriers Association revealed the company has gained more subscribers for the fifth straight month than its biggest rivals NTT DoCoMo and KDDI. Energy and Financial stocks gained as well.

Oil prices rose for the first time in five days to $81.44 per barrel after an unexpected decline in U.S. stockpiles. Inpex Holdings gained 2.54%, Nippon Oil rose 0.85%.

Director of petroleum and gas division for the Agency of Natural Resources and Energy Shin Hosaka said today the Ministry of Economy, Trade and Industry will notify Japan’s oil companies of Angola’s tender for blocks scheduled for December. He added that Japan was finding it difficult to source oil from the African market in the wake of competition from China.

According to Hosaka METI is set to increase crude oil imports from companies fully and partially owned by Japanese to 40% by 2030 from the current 15%. Japan imports all its oil requirements and imports 4.25 million crude oil barrels a day in 2006. Of the imported oil 90% is sourced from the Middle East and Angola accounted for less than 1% of its imports.

Japan’s Ministry of Finance said today foreign exchange reserves rose for the fourth consecutive month to a record $945.6 billion in September. The September reserve is $13.44 billion more than the record amount of $932.16 billion reached in August.

Foreign securities stood at $794.04 billion as at September 30 compared to $785.6 billion a month earlier, while forex deposits surged from $125.27 in August to $125.50 in September.

Cabinet Office said today the leading index, a measure of outlook for economic growth, fell 30% from 50% in June and July as equities and housing starts slumped. The measure indicates that that the economy may slow in the next three to six months. The coincidence index, which gauges business conditions, was at 83.3%, its fifth month above 50%.

Japan’s housing starts slipped to a 40-year low by 43% in August after surging in the past two months as applications for building permits soared from companies that wanted to beat the new law implemented on June 20th dictating a longer approval process.

Of the index shares Softbank Corporation led gainers with a rise of 5.36%, followed by rises of 4.78% in Japan Tobacco, 4.14% in KDDI Corp, 4.08% in Yahoo Japan Corp and 3.89% in Olympus Corp.

Softbank Corporation beat two largest rivals NTT DoCoMo and KDDI by adding a net 198,300 subscribers through aggressive marketing of its ‘au’ and ‘tuka’ services. NTT DoCoMo added 37,500 and KDDI increased 158,000 new subscribers. NTT leads the market with a total of 53 million subscribers followed by KDDI with 29.5 million subscribers, and Softbank with 17.1 million subscribers of which 11 million subscribers are on third generation wireless plans. The three companies are involved in a price war with monthly service charges as low as 900 yen and phone tariff of less than 10 yen per minute.

Casio Computer led the decliners with a sharp loss of 19.1%, followed by losses of 4.63% in Advantest, of 3.64% in Clarion Company Limited, of 3.56% in IHI Corporation and 3.46% in NGK Insulators.

Casio Computer Company forecasted net profit of 17 billion yen for the year ending in March 2008 down 39% from the 28 billion yen forecasted four months ago. The company forecasted annual revenue of 610 billion yen nearly 7% lower than its earlier estimate and a 30% decline in operating income to 37 million yen.

The company’s entry into the crowded market for personal mobile devices is also expected incur significant development and marketing costs. The company blamed the decline on lower prices, higher development costs, and on a sharp reversal in prices for LCD panels.

The press release noted that the financial results for the second half of the year are expected to record net sales of ¥20 billion, with an operating income of ¥5 billion below the previous forecasts as a result of taking into account the decline in the domestic market share for cellular phones, as well as the falling unit prices for TFT LCDs. The full-year financial results are thus forecast to record net sales of 610 billion, with an operating income of ¥37 billion, ordinary income of ¥31 billion, and net income of ¥17 billion.