Royal Bank of Scotland is considering a hostile bid for all of ABN Amro as a war of words broke out between the Dutch bank and its would-be British suitor, the Times of London reported.
It is understood that RBS and its partners would make any such move before an extraordinary general meeting of ABN shareholders called to vote on the sale of its U.S. operation, LaSalle, to Bank of America .
Talks between ABN and a group comprising RBS, Santanderand Fortis broke down on Sunday mainly because the consortium's offer to buy ABN's U.S. arm LaSalle Bank and a proposal for the rest of the Dutch bank were conditional on both offers succeeding.
The RBS group's plans were unclear after ABN rejected its $24.5 billion offer for LaSalle, which was tied to its 72 billion euro ($98 billion) mostly cash proposal for all of ABN. A friendly deal now appears unlikely, analysts say.
"We continue to expect the RBS-led consortium to make an offer for the whole ABN group, although this is increasingly looking like it may need to go directly to ABN shareholders," Keefe, Bruyette & Woods analysts said in a research note.
The consortium is now free to make a public tender offer for ABN under Dutch regulations and it is considering its options for what would be the world's largest bank takeover, sources familiar with the matter said.
ABN shareholders may dictate the next steps.
A Dutch court ruled last week that shareholders should vote on the LaSalle sale, while ABN said investors will get the chance at an extraordinary general meeting to express "their views on the alternatives available to them at that time."
Certainty and Deliverability
How many options will be presented and a date for the vote were not clear. Almost 70% of ABN's shareholders recently voted for the bank to sell or merge parts or all of it, and some investors want it to be more open to the consortium's approach.
"We hope ABN will include all offers for LaSalle, irrespective of management's view of them," Alex Potter, analyst at Collins Stewart, said.
Barclays, which agreed an all-share takeover of ABN worth 66 billion euros two weeks ago, said events at the weekend left the situation unchanged.
"The offers from Bank of America and Barclays offer ABN shareholders certainty, deliverability and value," Barclays CEO John Varley said in comments made available to Reuters.
Barclays is now likely to watch events develop. The sale of LaSalle is a condition of its deal, so its plans may be delayed by a long legal wrangle, but its prospects of winning could be helped if legal risks obstruct its rivals.
Bank of America sued ABN on Friday, seeking damages and a court injunction to block the sale of LaSalle to a rival bidder.
There also remains uncertainty about the funding of the 50 billion euro cash part of the consortium's proposal, expected to rely on big rights issues by Santander and Fortis, with the latter not until the fourth quarter, according to a source familiar with the matter.
ABN shares fell 1% to 35.5 euros, down for a second day as the setback to the consortium reduced the chance that Barclays' offer will be trumped, dealers said. RBS shares rose 1.1% while there was little change in Barclays, Santander and Fortis.