Second Hedge Fund Opposes Barclays’ ABN Bid

Jun 13 2007 | 8:41am ET

Barclays said Tuesday that it is moving forward with its proposed merger with Dutch bank ABN Amro, in spite of growing opposition among hedge fund shareholders.

On Monday night, Seacliff Capital, a San Francisco hedge fund not noted for its activism, inveighed against the deal with Barclays management. In an e-mail to top Barclays executive, James Ellman, president of the $200 million fund, wrote, “We are not a large shareholder but we do not understand the logic of this deal,” according to the Financial Times. “We are very unhappy with it and would vote against it.”

Seacliff has already put its money where its mouth is: The fund has slashed its small stake in the British bank by roughly half since the merger bid was announced.

But Barclays CEO John Varley said the deal is moving ahead.

“The progress which Barclays has made with its regulatory filings and offer documentation demonstrates the high degree of deliverability and certainty which the Barclays offer provides ABN Amro shareholders,” he said in a statement. “Approval is currently pending with the relevant regulatory authorities.”

Seacliff is the second hedge fund with a stake in Barclays to cry foul over the deal. Atticus Capital, which owns about 1% of the bank, has publicly called for Barclays to drop the bid and has said it will vote against the merger.

On the other side of the deal, hedge funds are also battling the bid. London-based The Children’s Investment Fund, an ABN shareholder, has vocally criticized the deal and the negotiations leading to it. The hedge fund had been seeking to split up ABN before the deal with Barclays was announced.


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