BIZCHINA / Center |
CDB 'unhurt' by Barclays decisionBy Fei Ya (China Daily)
Updated: 2007-10-10 09:43 British bank Barclays' withdrawal from a takeover bid for ABN Amro will not affect its partnership with China Development Bank (CDB), analysts said yesterday.
CDB got on board the Barclays bid in July. The withdrawal divests it of the opportunity to join the financial industry's biggest takeover. CDB has also lost its chance to increase its investment in Barclays - the July agreement stipulated that if the bid for ABN Amro failed, CDB would not be entitled to a further 7.6 billion euros of Barclays' ordinary shares. This would have taken CDB's total investment in Barclays to 5 percent. The Chinese bank paid 2.2 billion euros for a 3.1 percent stake in Barclays' existing share capital in August. But analysts said yesterday that Barclays' withdrawal will have little impact on its partnership with CDB. "CDB's main focus in the July deal was forming a strategic partnership with Barclays, rather than playing a part in ABN Amro," said She Minhua, an analyst with CITIC China Securities. Li Yongsen, a professor at Renmin University of China, agreed that Barclays' move would not affect cooperation between the two banks. Barclays began giving assistance and advice to CDB on risk management, investment and other issues based on the July agreement. "Barclays' experience in fixed-assets investment and macroeconomic research might help CDB overcome weakness in these areas, as it tries to become a comprehensive financial institution," said She. |
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