Fred the Shred ‘in last-minute bid to halt killer deal’

FORMER RBS boss Fred Goodwin tried pull out of the catastrophic deal to buy ABN Amro at the last minute, according to a new book on the collapse of the Scottish bank.

The £58billion takeover of Dutch bank ABN Amro in 2007 is now seen as the final nail in RBS’s coffin which led to the taxpayer bailout.

But a new book claims that Goodwin twice tried to persuade his senior partner in the takeover, Spanish bank Santander, to drop the takeover but could not convince them to agree with his revised view.

The book, called Shredded – a play on Goodwin’s nickname of Fred the Shred, which he was dubbed as a result of his tendency to slash budgets ruthlessly in order to meet targets – has been written by financial journalist Ian Fraser.

The author claims that Goodwin decided on the need to back away from the deal after ABN Amro sold its US arm, Lasalle, to Bank of America. Goodwin saw Lasalle as ABN’s prize asset and was uncertain about the wisdom of going ahead with the takeover without it being included.

However, Santander, which was destined to also acquire ABN’s Latin American and Italian businesses, was still wedded to the plan.

Fraser claims Santander chief Emilio Botin insisted that the takeover of ABN could not be called off because RBS, Santander and Belgian bank Fortis had jointly signed a legally binding deal to go ahead. It is claimed that Botin threatened legal action if RBS tried to renege on the plan.

The book also claims that the Spanish bank was boastful about its role once the deal had concluded. In the carve-up of ABN assets it acquired Brazilian bank Banco Real and Italian group Banca Antonveneta. It struck a deal to sell the latter for a €2 billion profit before the ABN deal had even concluded.

Alfred Saenz , the chief executive of Santander at the time, is reported to have said: ‘We are the only ones coming out smiling. We have got the better of [or ‘shafted’ according to some translations] our consortium partners.’

The book also details an alleged falling-out between the bank and Goldman Sachs over RBS’s £12billion 2008 rights issue.

Goldman, an underwriter on the capital raising, is said to have passed on some of its shares to hedge funds to cover its position, in a move that could have undermined the deal.

The investment bank was subsequently docked its 0.25 per cent success fee on the deal, the book says.

A Goldmans spokesman said the account ‘contains characterisations which we reject’. He added: ‘RBS remains an important client of the firm.’

RBS declined to comment.