Ex-ABN Amro CEO Says Takeover Was Bizarre And Irresponsible

The former chief executive officer of ABN Amro Holding NV, Rijkman Groenink, said Wednesday that the EUR71 billion takeover of the bank by a consortium of three banks, the largest ever in the financial sector, was bizarre and irresponsible.

Groenink said he should have resigned at the time to show his disapproval of the deal. "I shouldn't have taken responsibility for the acquisition because I was against it," he said. "Up to this day, I regret that we weren't able to prevent it."

In 2007, right before the financial crisis began, ABN Amro was acquired for EUR71 billion through a hostile takeover by a consortium made up of the U.K.'s Royal Bank of Scotland Group PLC (RBS), Spain's Banco Santander SA (STD) and Dutch-Belgian firm Fortis NV.

The consortium was competing to acquire the business against the U.K.'s Barclays PLC (BCS). Groenink said at the time he supported the Barclays bid as it was good for shareholders.

However, the consortium deal turned sour within a year. When Fortis was on the brink of bankruptcy the Dutch government stepped in to buy its Dutch banking operations, including its interest in ABN Amro.

Groenink Wednesday appeared before a parliamentary committee in The Hague, which is investigating the causes of the financial crisis. He was questioned on his spell at ABN Amro, especially regarding the takeover.

Looking back, Groenink said the consortium had acted "so bizarre and irresponsible I couldn't have imagined."

He said the three banks were poorly informed beforehand and that the price they offered was absurd. "The due diligence was limited and they based most of their information on the past. They didn't know what they were buying."

Groenink, who stepped down from ABN Amro after the acquisition was completed, said that a merger with Barclays would have made much more sense. Prior to the consortium showing interest, ABN Amro had been in talks with Barclays about a merger, a move that would have avoided a lot of problems, Groenink said.

"It's likely that this combination wouldn't have required a substantial amount of state aid. It would have entered the crisis with the highest solvability. In that case, the Dutch state wouldn't have spent EUR30 billion on ABN Amro," he said.

After the takeover was completed, Groenink received a departure package of tens of millions of euros. "I found it a bit wry, as I didn't want this takeover. I accepted it with a certain amount of anger," he said.

-By Maarten van Tartwijk; Dow Jones Newswires; +31 20 571 5201; maarten.vantartwijk@dowjones.com

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