Royal Bank of Scotland led consortium has confirmed that their sweetened offer for ABN Amro Holding NV’s LaSalle Bank was rejected by the Dutch bank. In a separate release, Amsterdam-based ABN Amro has said that the group’s $24.5 billion bid for Chicago-based LaSalle was not ’superior'’ to an earlier $21 billion bid from Bank of America Corp. LaSalle is at the core of a struggle for control of ABN Amro, the biggest Dutch bank, between Barclays and the group led by Royal Bank. In addition to it, the sale of the Chicago-based bank is also the subject of a court fight in the US and the Netherlands.
Intensifying the ongoing battle for the takeover, a Dutch court had ruled last week that ABN must put the sale of the US bank to shareholders for a vote, throwing into doubt whether Bank of America could clinch the deal. Bank of America has filed a lawsuit against ABN Amro on Friday, seeking compensations and a court injunction to block the sale of ABN’s US unit LaSalle to a rival bidder.
Royal Bank of Scotland, Fortis and Santander had extended unofficial conditional offers for both LaSalle bank and the whole ABN Amro group, in an endeavor to disrupt the approved offers by Bank of America and Barclays. The RBS group is offering $24.5 billion or £12.3 billion in cash for LaSalle, provisional on ABN also accepting a €39.40 or £26.89 a share cash and equity offer for the whole ABN Amro group, which would evaluate the company at more than €72 billion.
In fact, ABN is strongly wants to persuade the RBS led group to make its offer unconditional. A faction of analysts feels that an agreement with the RBS consortium would be expected to generate greater synergies. At the same time, Barclays asserts that its offer carries less regulatory, litigation and financing risks. There also remains the likelihood that other bidders may yet enter the fray. The Spanish bank BBVA and the French banks Societe Generale and BNP Paribas, are also thought to be considering their options.
Despite the consequences of the result, Santander may be set to lose Bank of America as its joint venture partner in Brazil. The US bank is supposed to be infuriated about Santander’s involvement with the RBS consortium, and has hinted to sever its alliance with the Spanish bank. In the meanwhile, rumors have started taking rounds that RBS’s Direct Line and Churchill insurance businesses are being lined up for a sale. The firms, which together are the biggest personal lines general insurance business in the UK, could bring in up to £8 billion if it is sold out, the profits of which could be used to help finance its acquisition of LaSalle.
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