KEY POINTS:
Royal Bank of Scotland, Fortis and Santander laid down unofficial conditional offers yesterday for both LaSalle bank and the whole ABN Amro group, in an attempt to derail the agreed bids by Bank of America and Barclays.
The RBS consortium is offering US$24.5 billion ($33.2 billion) in cash
for LaSalle, conditional on ABN also accepting a €39.40 a share cash and equity offer for the whole ABN Amro group, which would value the company at more than €72 billion ($133 billion).
Bank of America and Barclays now have five days to match the consortium's bids. However, it is by no means certain that ABN will accept the RBS group's bid, even though it is higher than the initial Barclays and Bank of America bids.
Although RBS is believed to have its financing for the bid fully underwritten, it is believed that Fortis and Santander do not yet have such certainty over their financial arrangements. Both would have to carry out rights issues to fund their part of the bid, and these may not be complete before the end of the year.
Bank of America's multibillion-dollar lawsuit against ABN Amro, which it launched on Friday, also threatens to prevent the RBS consortium successfully buying LaSalle. The US bank has asked a US court to block the sale of LaSalle to anyone but itself, and is suing ABN for halting the sale of its US subsidiary.
ABN Amro froze the sale of LaSalle last Thursday on the orders of a Dutch court, which upheld complaints from a group of shareholders who claimed the Bank of America deal had prevented other bidders making higher offers for the whole ABN Amro group. The court ruled that it was unacceptable for it to sell LaSalle without seeking approval from shareholders.
A deal with the RBS consortium would be expected to generate greater synergies. However, Barclays claims that its offer carries less regulatory, litigation and financing risks.
There also remains the possibility that other bidders may yet enter the fray. The Spanish bank BBVA and the French banks Societe Generale and BNP Paribas are also believed to be considering their options.
It remains in all the parties' interests to close a deal as soon as practicable. Several of ABN's clients have put their contracts with the bank under review as a result of the battle. The longer the saga stretches on, the greater the chance of further value being eroded from the ABN business.
Regardless of the outcome, Santander may be set to lose Bank of America as its joint venture partner in Brazil. The US bank is believed to be furious about Santander's involvement with the RBS consortium, and has threatened to sever its ties with the Spanish bank.
- INDEPENDENT