RBS Group Clashes with ABN over Access to its Books
A trio of banks seeking to buy ABN Amro said on Thursday the Dutch bank was setting unreasonable conditions on opening its books, increasing the chance they could launch a hostile bid.
ABN, which agreed an $88 billion takeover by Britain's Barclays on Monday, said overnight it was prepared to open its books to rival suitors Royal Bank of Scotland, Santander and Fortis, who have proposed a higher offer but will break up the Dutch bank.
But the increasingly acrimonious battle between Europe's top banks took a fresh turn on Thursday, when the consortium said agreements it would have to sign before carrying out due diligence included a provision blocking a bid direct to shareholders.
"(The confidentiality) agreement contains a standstill provision which would prevent the banks from making an offer for ABN Amro within 12 months without the prior written consent of ABN Amro," the three banks said, confirming what a source familiar with the situation had earlier told Reuters.
"The banks have requested that ABN Amro remove this standstill provision," they said in a brief statement.
Another source familiar with the matter said the consortium would now wait to see whether shareholders or ABN's supervisory board could force the bank to change the controversial provision before deciding on their next step.
But ABN indicated it was unlikely to stand down, saying Barclays had signed an identical provision.
"We are showing that we are cooperating in every respect," ABN Chief Executive Rijkman Groenink said on Thursday.
The banks fighting to scupper the agreed deal with Barclays have said they did not expect to spend long on due diligence -- after Barclays spent five weeks poring over ABN's books -- indicating they could be prepared to make an unsolicited bid.
A source familar with the matter said the consortium expected to spend less than 10 days on due diligence.
ABN, under growing pressure from shareholders, agreed to open its books to the rival suitors just hours before its annual shareholder meeting (AGM) in The Hague.
Several vocal shareholders, including hedge fund TCI with just under 3%, have threatened to sue the ABN board and have demanded it allow the consortium free access to its books.
They have also criticised ABN's $21 billion deal to sell U.S. business LaSalle to Bank of America , which allowed it to offload an asset which would appeal to RBS without a shareholder vote.
Emotions ran high at the AGM with shareholders grilling the board. One shareholder -- the head of Dutch investor group VEB -- jumped on the stage, only to be removed by bodyguards.
But ABN's Groenink stuck by earlier statements on LaSalle, saying the deal with BoA did not preclude other suitors if they were willing to trump that offer.
He has indicated suitors could still buy LaSalle and the remainder of the group, but would have to do it separately.
"I hope another bidder makes an offer for LaSalle," he told shareholders, saying he wanted to get the best price possible.
BoA would be allowed to match any competing offer.
Barclays, which also had its shareholder meeting on Thursday, also stuck by its confident statements and moved to ease concern over the LaSalle sale, key to its deal.
"There's a lot of noise (about the LaSalle deal), a lot of whining and crying that the system isn't fair, but we think it's very fair," Bob Diamond, Barclays president, said.
"The deal on Monday was clear. If (rival bidders) want to bid for LaSalle, they can bid for LaSalle."
Both Barclays and the consortium want to expand as the European market consolidates.
ABN had the same ambitions, pushing into Italy two years ago to clinch Antonveneta, but its share price lagged and pressure increased on the bank and its management after TCI in February pressed it to break up or sell itself.