Bidding war erupts to buy ABN Amro

 

 

Scotland bank makes higher offer By TOBY STERLING AMSTERDAM, Netherlands (AP) — One of the largest takeovers in corporate history escalated into a bidding war as a consortium led by Royal Bank of Scotland said it planned to top Barclays’ multi-billion dollar offer for ABN Amro with a bid worth nearly US$ 100 billion. Shareholders immediately pressured ABN to commit to accepting the highest bid, ahead of the Dutch bank’s annual shareholders’ meeting Thursday, and analysts said the key battleground in what is shaping up to be a long fight would be over LaSalle Bank in the United States. One analyst called LaSalle the "crown jewel" of ABN’s international operations. Royal Bank of Scotland PLC, Spain’s Banco Santander Central Hispano SA and Belgian-Dutch bank Fortis NV said Wednesday they would offer around US$ 52.95)per share for ABN Amro Holding NV — 70 percent in cash and 30 percent in RBS shares — valuing ABN Amro at roughly US$ 98.1 billion) That is more than 10 percent higher than Barclays PLC’s all-share offer of euro 36.25 announced Monday, which was endorsed by ABN’s management. ABN shares are up more than 35 percent since it entered talks with Barclays last month. Shares rose 3.5 percent to close at euro36.21 (US$ 49.17) in Amsterdam on the news — above Barclays’ offer price at the British bank’s current stock price, but below the proposed rival bid by RBS. That means investors have serious doubts about who will win the fight to buy ABN, the Netherlands’ largest retail bank. The uncertainty stems from doubts about whether ABN Amro’s surprise move Monday to sell LaSalle Bank Corp. to Bank of America Corp. for US$ 21 billion, as part of its deal with Barclays, can be undone. "The crown jewel is LaSalle, which both BofA and RBS want badly, but for different reasons," said Bob Graves, co-chairman of the global banking practice at law firm Jones Day. With its dominant position in Chicago and parts of the Midwest, Graves said LaSalle would "fill the one remaining hole in BofA’s national coverage." "For RBS, it’s more of a stepping stone" to give its US operations critical mass, he said. RBS is the largest foreign bank in the US, via Citizens Financial Group, which is strongest in the US Northeast. "It doesn’t happen every day, when something like this comes on the market," RBS Chief Executive Fred Goodwin said at his company’s annual shareholders meeting in Edinburgh Wednesday. "It’d nice to own LaSalle, it’d be nice to own some of the other bits" of ABN.

 

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