UK/NETHERLANDS - British hedge fund, TCI has demanded Dutch banking group, ABN Amro put itself up for sale or to break up in order to increase the value of the company.
TCI, which now owns 1% of the Dutch bank, has complained in a letter to Alfred Martinez, the bank's chairman, of the poor returns for shareholders since executive chairman Rijkman Groenink took the helm in 2000, Dutch daily NRC Handelsblad reports.
The ABN Amro share needs to be valued over €30, TCI was quoted as saying. The shares' value rose during Wednesday by over 6% to €27.50, which analysts view as a sign of more hedge funds joining the fray.
TCI has invited ABN Amro to put the issue up for discussion during the shareholders' meeting on 21 April, daily Het Financieele Dagblad quoted TCI partner Patrick Degorce as saying. "The management should actively look at all options for merging and selling or breaking up."
According to the bank's articles of association, a stake of 1% is sufficient to get a subject on the agenda of a shareholder's meeting.
In addition, TCI has also urged ABN Amro to refrain from any take-over, for example of the Italian bank Capitalia in which it is the largest shareholder.
"We will listen to the opinion of our shareholders. We hope for a dialogue with the financial markets," an ABN spokesman said.
Bank-insurer, ING - one of ABN's largest shareholders - declined to comment on the issue.
TCI - the Children's Investment Fund Management - is led by Christopher Hohn, who earned his spurs as a money manager for hedge fund, Perry Capital in London.
In 2003, TCI managed to bring down the Deutsche Borse's chief executive, Werner Seifert and chairman, Rolf E. Breuer, during its resistance to the Borse's €1.9bn bid for the London Stock Exchange. Whilst it owned just an 8% stake in the Borse, TCI actively recruited some powerful partners, including Atticus, Merrill Lynch and Fidelity Investments.
What make TCI unique is its annual donation - through a foundation run by Hohn's wife - of the equivalent of 0.5% of assets under management to charity.