A consortium of three banks led by the Royal Bank of Scotland announced Tuesday that it will proceed with its €71.1 billion ($95.61 billion) takeover offer for ABN Amro Holding. At the same time, the consortium is struggling with Bank of America for control of LaSalle Bank, ABN's U.S. holding. The RBS, Fortis and Santander consortium, which wants to break up ABN, has raised the cash component of its offer from 70% to 79%; the remainder will consist of new shares of RBS. The €38.40 ($51.59) per share price represents a 13.7% premium over Barclays' all-stock offer, which was accepted by ABN in April. When it announced the agreement with Barclays, ABN also said it had sold LaSalle to Bank of America for $21 billion, a sale that was later frozen by a Dutch judge. BofA has sued ABN in U.S. federal court to enforce the sale. On May 7, the RBS consortium offered ABN $24.5 billion for LaSalle, contingent on ABN's agreement to be purchased as well; the offer was turned down. The consortium says its €71.1 billion offer for ABN, which is fully financed, is conditional on ABN shareholders' voting to block the sale of LaSalle to BofA. A vote has not yet been scheduled.
Sources: Wall Street Journal, Bloomberg, MarketWatch
Commentary: ABN Amro Opposes RBS-Led Rival Bid for LaSalle • ABN Amro Takeover: Rival Trio Tops Barclays with $98.5 Billion Bid • ABN Amro Agrees to Sell Itself to Barclays for $91 Billion
Stocks/ETFs to watch: ABN Amro Holding N.V. (ABN), Barclays PLC (NYSE:BCS), Royal Bank of Scotland Group plc [ADR] (RBSPY), Fortis NV [ADR] (FORSY), Bank of America Corp. (NYSE:BAC). Competitors: HSBC Holdings plc ADR (HBC), Deutsche Bank AG (NYSE:DB), UBS AG (UBS). ETFs: First Trust Morningstar Div Leaders Idx (NYSEARCA:FDL), PowerShares Intl Dividend Achievers (NYSEARCA:PID), iShares MSCI Netherlands Index (NYSEARCA:EWN)
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