ABN Amro’s management faced attacks on two fronts at the same time as a Royal Bank of Scotland-led consortium sought to mount up the pressure on the Dutch bank ABN Amro yesterday by formally notifying it of a possible hostile bid in a week’s time. It comes as the shareholder association VEB prepares an attempt to block the controversial $ 21 billion sale of ABN’s US bank LaSalle to Bank of America at the ‘Enterprise’ Court in the Netherlands. These developments have potentially threatened to throw the increasingly bitter battle into turmoil.
In case if the court agrees to VEB’s proposition and blocks the sale of LaSalle, it could prompt a lawsuit from Bank of America against ABN, under its US contract to acquire the subsidiary. However, the court’s decision is not likely to come until the middle of next week at the earliest. On the other hand, according to reports the consortium was now ‘actively considering’ putting forward two offers, one for ABN and one for LaSalle, to make safe its target of taking over the whole group.
LaSalle remains crucial to the deal. Securing control of the US bank is the main boner of contention that Royal Bank put together the consortium, which also includes Spain’s Banco Santander and the Belgian bank Fortis. However, the endeavor by the consortium to force LaSalle away from Bank of America already jeopardizes to sour relations between Santander and Bank of America, which have an important joint venture in Mexico.
The dual developments heightened the catastrophic environment surrounding the Dutch bank, now sitting at the center of the largest takeover struggle in the history of the financial industry, with as much as $100 billion at stake. The Enterprise Chamber of the Amsterdam Superior Court has approved to hear the case on Saturday morning due to the urgency of the matter. ABN Amro’s deal with Bank of America is to close at midnight May 6 unless the court blocks it or ABN receives a higher bid.
