ABN Amro Takeover: Rival Trio Tops Barclays with $98.5 Billion Bid

ABN Amro's shares rose up to 6.3% on news that the consortium battling Barclays for the Dutch bank -- Royal Bank of Scotland [RBS], Banco Santander Central Hispano and Fortis NV -- has submitted an offer for ABN of $98.5 billion (€72.2 billion, or €39 per share), besting the $91 billion offer from Barclays agreed to on April 23 by ABN's management. The consortium's bid consists of 70% cash and 30% RBS shares, giving it an appeal to shareholders over Barclays' all-share offer. The bid is contingent on the granting by ABN of due diligence and the assurance that LaSalle Bank, which ABN has announced it is selling to Bank of America, will instead stay within the ABN group. The terms of the LaSalle sale permit a rival bidder to offer a higher price within 14 days. Bank of America will have the right to match any new bid, and if it chooses not to, ABN will pay it a breakup fee of $200 million. Activist investor TCI Fund Management is demanding that the ABN board "recommend the Royal Bank consortium offer...and terminate the LaSalle Bank sale" at its annual board meeting tomorrow. The consortium intends to break up ABN, a prospect favored by TCI and one ABN CEO Rijkman Groenink is trying to avoid.

Sources: Bloomberg, Reuters (I, II), Forbes
Commentary: ABN-Barclays Merger: Rival Bidders and Investors Query LaSalle Sale • ABN Amro Agrees to Sell Itself to Barclays for $91 Billion • Trio of European Banks Eyes ABN Amro
Stocks/ETFs to watch: ABN Amro Holding N.V. (ABN), Barclays PLC (BCS), Royal Bank of Scotland Group plc [ADR] (RBSPY), Fortis NV [ADR] (FORSY), Bank of America Corp. (BAC). Competitors: HSBC Holdings plc ADR (HBC), Deutsche Bank AG (DB), UBS AG (UBS). ETFs: First Trust Morningstar Div Leaders Idx (FDL), PowerShares Intl Dividend Achievers (PID), iShares MSCI Netherlands Index (EWN)

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