RBS-Led Group Threatens Hostile Bid for ABN Amro
Three banks led by Royal Bank of Scotland said on Friday they were ready to make an unsolicited offer for ABN Amro , increasing pressure on the Dutch bank to consider an alternative to an agreed deal with Barclays.
In addition, ABN Amro was called to a hearing at the Enterprise Chamber of the Amsterdam Court of Appeal at 9 am Amsterdam time Saturday after the Dutch shareholders' association VEB demanded that ABN Amro ask shareholders to vote on its planned $21 billion sale of its U.S. unit LaSalle to Bank of America .
The RBS-led consortium, which is pressing ABN for full access to its books, said it wanted to meet with the Amsterdam-based bank's board as soon as possible.
The consortium, which also includes Spain's Santander and Belgian-Dutch group Fortis, earlier this week proposed a 72 billion euro ($98 billion) bid for the Dutch bank, trumping an agreed offer with Britain's Barclays.
But their proposal was conditional on ABN scrapping its planned $21 billion sale of U.S. unit LaSalle Bank -- a key asset for suitor RBS -- to Bank of America.
The banks said on Friday that the conditions of that sale -- which include a "go-shop" clause allowing ABN until midnight on May 6 to seek higher bids -- prompted a formal notification of
their intention to make a public offer.
Under Dutch law, a bidder can either agree an offer with management or must give 7 days' notice of its intentions. A suitor cannot announce a price without giving the target a chance to discuss the offer over that 7 day period.
A 7-day period from the notification late on Thursday would end late next week -- days before the LaSalle sale closes.
"The consortium want an agreed bid, but they also want to ensure the right to make an offer anyway," one source familiar with the matter said.
"This is a procedural move. It keeps the options open," another source close to the matter said, adding the banks had not yet signed a controversial confidentiality agreement that would allow them access to ABN's books.
ABN said in the early hours of Thursday it would allow the banks due diligence subject to confidentiality clauses -- which the suitor banks later said included a 12-month provision
precluding an unsolicited offer.
ABN's management favours a deal with Barclays, saying it wants to build up the business rather than break up the bank.
Sources close to the matter said the consortium still hoped to sign the confidentiality clauses, but only without the 12-month "standstill" provision.
"This appears to suggest that the consortium would be willing to launch a hostile bid if necessary," Bear Stearns said in a note. "It might also suggest that the conditions previously
announced when the consortium declared its interest in making a bid for ABN Amro could be waived."
Even as the biggest ever bank takeover battle heated up shares in the banks remained broadly flat, with ABN up 0.7% at 36.56 euros -- just above the Barclays offer, worth 35 euros at current prices, but still well below the RBS consortium's 39 euro-a-share offer, indicating market expectations of a drawn out fight for ABN.
The banks said in a statement that under Dutch regulation they are not permitted to provide details of the price they had indicated in their notice to ABN's boards.
"The banks continue to believe that their proposals offer materially higher value for ABN AMRO's shareholders and benefits to customers and employees compared with the recommended offer
from Barclays," the consortium said.
"The banks have invited the supervisory and managing boards of ABN Amro to discuss the banks' proposals further as soon as possible."
ABN declined to comment.