In takeovers, a white knight tends to appear at the end of the process to rescue a company from an unwanted bidder. So it is a sign of the unusual situation in which ABN Amro finds itself that a self-proclaimed white knight has emerged without another bid on the table.

Barclays’ exclusive discussions with ABN Amro are evidence of the complex and delicate discussions taking place about the future of the Dutch bank.

ABN Amro is attempting to thwart a campaign by activist shareholders to break up or sell the bank. At the same time, rival European financial institutions are casting an eye over all or part of its businesses.

Rijkman Groenink, ABN’s embattled chief executive, is trying to hang on to his job. And looming at the end of April is a crucial shareholder vote that could endorse or scupper the bank’s plans.

ABN Amro has been at the centre of takeover speculation for years. The bank’s position in markets such as Brazil, the US and Asia, combined with a history of poor returns, mean it has long been high on the shopping list of many European bank executives. However, despite numerous overtures, Mr Groenink’s demands proved too onerous.

The balance of power changed last month when The Children’s Investment Fund, an activist investor, demanded ABN Amro break itself up and proposed to put a motion to its annual shareholder meeting.

The bank must within 10 days publish the agenda for its April 26 annual meeting.

The key question for ABN is to determine the level of support for TCI, which has a 1 per cent stake but has received expressions of support from other investors.

But it is a far from scientific process, given that many shareholders are waiting to hear what the bank proposes before making clear their intentions.

“No one believes that it is only one fund with 1 per cent that is going after a €52bn [$69bn] bank, so what ABN has to judge is how big is the group of critics. I would not be surprised if it was as much as 15 per cent [of the shareholder base],” said one executive.

The bank made no secret that it was working on the divestment of various non-core activities in far-flung corners of the world before it received the TCI letter.

Those assets include a 40 per cent stake in Saudi Hollandi bank, and several corporate client business units in regions such as Latin America.

These divestments, combined with some accelerated cost-cutting, may allow ABN Amro to return some capital to shareholders and make a case for preserving the bank’s independence.

The most significant problem with this plan, however, is Mr Groenink himself, who after almost seven years in charge has little credibility left with investors.

Many outside ABN are sceptical of Mr Groenink’s survival chances but, despite rumours to the contrary, there is no clear indication that support from his supervisory board has weakened. There has however been talk of unrest within ABN’s management board for some time, a person close to the company said.

The departure from the executive board of Dolf Collee, who headed ABN’s struggling European division, involved “friction”, while the board lacks harmony, he said.

Restructuring, a theme of Mr Groenink’s tenure, has also bred unhappiness. “Groenink is tough but not warm. His antennas to his own people and the outside world are not always that good,” the executive said.

With shareholder support ebbing, Mr Groenink’s best remaining option is probably to negotiate a merger with a rival bank that preserves some of ABN Amro’s structure. “A sale with dignity,” as one investment banker calls this option.

The negotiations with Barclays, which has coveted ABN Amro for years and which has limited geographical overlap, meets this criteria. However, it remains to be seen whether the two sides can come up with a deal that meets Barclays’ criteria for shareholder value while also giving the Dutch bank a respectable price.

Any weakness in the Barclays share price could open the door for rivals, and leave ABN Amro’s white knight looking distinctly off-colour.

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