New twist in battle for Dutch bank
The battle to take control of ABN Amro intensified today after the Dutch bank rejected an €18bn bid proposal for its American banking business LaSalle from a consortium led by Royal Bank of Scotland.
ABN snubbed the $24.5bn (€18bn) offer from RBS and its partners, Belgo-Dutch group Fortis and Spain’s Santander, saying that it did not constitute a “superior offer” to Bank of America’s $21bn (€15.4bn) deal for the bank.
This is partly as the offer is conditional on a deal to buy the whole group at an indicative price of €38.40, or more than €72bn.
However, ABN said it would put the offer to shareholders at a forthcoming extraordinary general meeting to enable them “to express their views on the alternatives available to them at that time”.
ABN said the proposal contained “uncertainty and execution risk” including various regulatory, tax and legal issues. Additionally, ABN said it had not received any detail on how the consortium intended to fund the acquisition despite repeated requests.
RBS said in a statement that it considered the consortium’s offer superior as the price offered for LaSalle was “materially greater” than the offer from Bank of America and would have led to a public offer for ABN.
The development marks the latest step in the takeover saga for ABN, the largest bank in the Netherlands, and comes after a Dutch court ruled last week that ABN had been wrong to approve the sale of LaSalle without shareholder approval.
The decision opened the doors to RBS, but led Bank of America to file a law suit against ABN in the US to try to seek damages and an injunction to try to block the sale of LaSalle to a rival bidder.
RBS is trying to beat out ABN’s previously recommended £45bn (€66bn) merger with Barclays. The agreed sale of Chicago-based LaSalle to Bank of America had been seen as a “poison pill” to any rival approach for the bank.
A takeover of ABN Amro would be the world’s largest bank takeover.
If the RBS consortium succeeds in winning control of the bank it intends to break up the group, with Fortis taking its banking operations in Holland and Belgium, and Santander picking up its Italian and Latin American divisions. RBS is eyeing LaSalle and ABN’s Asian businesses.
A tie-up between ABN and Barclays would create the world’s fifth largest bank, and will see Barclays move the enlarged group headquarters to Amsterdam.
