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PGGM adds voice to ABN Amro’s critics

NETHERLANDS - Beleaguered Dutch bank, ABN Amro said it was happy to talk with shareholders as they mount pressure to break up the bank.

Two weeks ago activist hedge fund The Children's Investment Fund (TCI) complained in a letter to the bank's chairman of poor returns since executive chairman, Rijkman Groenink took the helm in 2000.

Last night the healthworkers' pension fund, PGGM said the bank had failed to create the value it had promised and there had been a lack of focus in recent years.

The €81bn fund says it shares TCI's concerns over ABN Amro's underperformance while civil servants' fund ABP says it is "following the case critically."

The schemes are estimated to hold a combined stake of little over 1%. TCI holds 1%.

The Dutch financial daily, Het Financieel Dagblad reported this morning that ABN Amro, unlike supermarket concern Ahold which came under activist hedge fund fire last year, would be willing to discuss alternatives with TCI.

ABN Amro spokesman, Neil Moorhouse declined to comment to IPE on PGGM's critique but said that the bank always seeks "open communication" with its shareholders.

Moorhouse refused to confirm whether the bank is planning to give in to TCI's demand to break up the bank into parts to create more shareholder value.

According to Het Financieel Dagblad, TCI said that in the past few days many shareholders, "including large institutional investors and pension funds", have shown their support for its plans.

Instituional shareholders backing the plan can count on support from the trade union congress, FNV, whose vice-chairman Peter Gortzak said in a television interview earlier this week that the union would not press pension funds to vote against TCI motions.

It is unclear whether talks will be held before the annual shareholders' meeting on April 26, for which all shareholders with a minimum stake of 1% can introduce an agenda point. Nor is it clear if ABN Amro will put TCI's suggestion on the agenda.

Next to TCI, ING Group, Delta Lloyd, and Fortis hold 6.5%, 1% and 0.6% respectively. Fortis and ING declined to comment.

Delta Lloyd was reported as saying that TCI had not approached the firm yet, but that it would "hold off" talks with the hedge fund, calling the approach "fairly aggressive".

Last month, ABN Amro announced it wants to start a €1bn share buyback programme, which will be completed by June 30.

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