Judge Orders Freeze of ABN Sale of LaSalle to BoA

A judge at the Dutch commercial court has ordered ABN Amro to halt its $21 billion sale of LaSalle Bank to Bank of America on the grounds that shareholders need to be consulted. The decision could scupper a related €66.31 billion all-stock takeover offer from Barclays for the whole of ABN. If Barclays' bid fails, Barclays itself could become a takeover target. The ruling constitutes a victory for a rival triumvirate, led by Royal Bank of Scotland [RBS], that has made a cash-and-stock offer of €72.27 billion for ABN. RBS, which is seeking to expand its U.S. presence, is preparing a rival bid for Chicago-based LaSalle. The terms of the transaction dictate that BoA will be owed a $200 million breakup fee if ABN accepts a rival bid for LaSalle. Some contend it is in BoA's interest to accept the exit, since the federally mandated 10% cap on a single bank's share of the U.S. deposit market would require BoA to reduce its share in stronger regions to buy LaSalle's weak Detroit market. BoA has at least two legal options before it: 1) to sue ABN for breach of contract; and 2) to sue RBS for contract interference. ABN has declined comment on a report that CEO Rijkman Groenink will meet with the RBS consortium on Friday. ABN shares closed up 1.9% Thursday at €36.60, valuing the bank at about $95.5 billion.

Sources: MarketWatch, Wall Street Journal, TheStreet.com
Commentary: Dutch Court to Decide Thursday on ABN's Sale of LaSalle to BoA • ABN Shareholders Determined to Thwart LaSalle Sale to BoA; RBS-Led Consortium Reiterates Rival Bid • Memo to Barclays: ABN Amro's US Banks Are a Mixed Bag
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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