A trio of banks led by Royal Bank of Scotland has proposed a 72 billion euro ($98 billion) bid for Dutch bank ABN AMRO, threatening to thwart an agreed takeover by British rival Barclays.
The RBS group, which also includes Spain's Santander and Dutch-Belgian bank Fortis, said on Wednesday it planned to offer 39 euros a share for ABN, provided the Dutch bank scraps its planned $21 billion sale of U.S. unit LaSalle Bank to Bank of America.
The offer, 70% in cash and 30% in RBS shares, would beat the all-share bid announced on Monday by Barclays -- worth around 65 billion euros or 35 euros per share at Wednesday's close -- and could trigger the biggest-ever bank takeover battle.
But the consortium, due to talk to ABN via a conference call later on Wednesday, will first have to unpick the LaSalle deal.
LaSalle is ABN's most attractive asset for RBS, which already has the biggest U.S. presence of any overseas bank. The swift sale of the bank -- announced on Monday after only four days of due diligence and with a $200 million break fee -- was widely seen as an effort by ABN and Barclays to put off rivals.
A bid by RBS and its partners would result in a full break up of ABN, an option ABN's management has shunned -- even though sources familiar with the matter say the RBS deal would involve fewer job losses than under Barclays, which would cut 23,600.
"If this was a fair fight and there wasn't this poison pill, this would be an open and shut case as of this morning," analyst Alex Potter at Collins Stewart said. "However, dealing with the way the LaSalle sale has been constructed it's all about whether there is some way of that being withdrawn."
Clock Ticks for Suitors
ABN Chief Executive Rijkman Groenink, in comments made available to Reuters, said the bank would talk to the RBS consortium, but added the only way to acquire all of ABN would be to bid for LaSalle and for the group -- separately.
"Anyone can still bid for LaSalle and for the rest of the group so they are still able to acquire the whole of ABN AMRO.
It only has to be done with two bids instead of one," Groenink said. "Everyone should realize this is actually a very good structure for shareholders as it maximizes the price for LaSalle as well as for the rest of the group."
Sources familiar with the matter have said ABN, under pressure from shareholders, may request more information from the three suitors, including on financing, before allowing them due diligence, which RBS has indicated could be done in days.
Wednesday's fresh RBS approach comes on the eve of ABN's key shareholder meeting when shareholders are set to vote on a break-up proposal tabled by activist hedge fund TCI, and on the day of the Scottish bank's own annual meeting.