ABN Amro gets hostile $96B bid from RBS

ABN Amro NV said Monday it will let shareholders decide between a hostile 71.1 billion euros ($96.4 billion) mostly cash takeover offer from a group of banks led by Royal Bank of Scotland PLC and a friendly all-share bid by Barclays PLC worth around 64.2 billion euros ($87.1 billion).

ABN said it had received the RBS bid on Saturday, but could not recommend it because RBS had also made a separate $24.5 billion offer for ABN's Chicago-based U.S. subsidiary, LaSalle Bank Corp.

Either deal for ABN Amro would be the largest in banking history.

ABN has already agreed to sell LaSalle to Bank of America Corp. for $21 billion ($15.5 billion), as part of its deal with Barclays, and BofA filed suit Friday in U.S. District Court in New York seeking unspecified damages from ABN if that deal falls through.

Facing a potentially multibillion dollar lawsuit from BofA, ABN said Monday it had rejected RBS's "acquisition proposal for LaSalle ... as a result of the uncertainty and execution risks."

ABN's management agreed to sell LaSalle to BofA without asking its shareholders for approval, in what was widely seen as a poison pill measure designed to frustrate the consortium and help the Barclays deal go through.

ABN's management says the Barclays deal is a merger, whereas the RBS group's offer amounts to a carve-up of ABN's assets.

But the company was sharply rebuked by a Dutch court last week.

ABN's boards had "misunderstood" their duties in agreeing to sell LaSalle, the ruling by the Amsterdam Superior Court said, and were trying to present shareholders with a "done deal" that might not be in their best interests. It ordered the LaSalle sale frozen.

But Bank of America, based in Charlotte, North Carolina, says its contract to buy LaSalle is valid regardless of what Dutch courts say or what ABN shareholders do, setting the stage for a trans-Atlantic jurisdictional fight.

ABN said Monday it would call a meeting of shareholders to discuss the situation and the rival bids, without setting a date.

ABN Amro said it could not endorse the RBS bid of 38.40 euros ($52.08) per ABN Amro share _ despite its being worth at least 10 percent more than the 34.64 euros ($46.98) offer from Barclays because it was "subject to numerous further conditions."

"Fundamental aspects of the (RBS) offer for ABN Amro ... remained unclear despite repeated requests for clarification," the Dutch bank said in a statement, citing financing as a key concern.

Kempen & Co. analyst Ryan Palecek told Dow Jones Newswires that ABN's rejection of the RBS-led bid for LaSalle could be a sign that ABN Amro is still trying to obstruct the consortium.

"The points in the consortium's offer which supposedly lack clarity ... appear to be" routine details, Palecek said, adding that he believes legal jockeying will continue until ABN shareholders meet.

Under the terms of ABN Amro's agreement with Bank of America, BofA has five days to match any competing bid "for the same businesses" of Chicago-based LaSalle. But since the RBS bid is conditional on the takeover of ABN, it wasn't clear whether its offer is really for the "same businesses."

ABN did not think so. Its statement Monday said it had sought legal advice and its boards had rejected the RBS proposal because of the condition.

Bank of America said it would not raise its bid since the RBS offer was invalid.

"We look forward to consummating our transaction on the terms set forth in our contract," spokesman Scott Silvestri said Monday. The first hearing in New York is set for June 15.

Belgian-Dutch bank Fortis NV issued a statement on behalf of the RBS consortium saying the members "considered their proposal to be a superior proposal under the terms of the contract between ABN AMRO and Bank of America."

Some investors interpreted Fortis' statement _ that a LaSalle buy "would have led to a public offer" for ABN _ as a sign the consortium may give up. The banks declined to make further comment.

ABN Amro shares fell 2.3 percent to 35.86 euros ($48.64) in Amsterdam Monday. That's still above the price suggested by Barclays' closing price Friday, which valued ABN at 34.64 euros, but well below RBS's cash-and-share offer of 38.40 euros _ suggesting there is significant doubt among investors as to which deal will prevail.

Among RBS's partners, Banco Santander Central Hispano SA of Spain wants ABN's high-growth Brazilian operations, while Fortis wants the Dutch bank's operations in the Netherlands, where they have significant overlap of branch offices.

International labor unions are opposed to the Barclays deal, which will lead to 24,000 jobs lost or outsourced to low-wage countries, mostly from England. A deal with Fortis would likely lead to more losses in the Netherlands, and the Dutch government and national bank are watching the sale of the country's largest retail bank nervously.