ABN Mulling RBS Consortium Bid; Supervisory Board Enters Takeover Fray

The managing and supervisory boards of ABN Amro are closely examining the Royal Bank of Scotland consortium's latest bid for the bank, which -- like its original bid -- is higher than the one ABN accepted from Barclays in April. ABN's supervisory board has formed a special "transaction committee" to evaluate the offers. The RBS consortium has offered €71.1 billion ($95.5 billion) for the bank, or €38.40 ($51.59) per ABN Amro Holding share, approximately 10% above Barclays' bid. In addition to being a greater sum, the RBS bid also consists of 79% cash (9% more than its original bid), while the Barclays bid is all stock. The consortium's offer depends, however, on the cancellation of ABN's pending sale of LaSalle Bank to Bank of America for $21 billion. BofA has filed suit in the U.S. to compel completion of the sale. RBS CEO Fred Goodwin said Tuesday the consortium's bid might have to be lowered by €1 a share, or €1.85 billion ($2.5 billion), to provide a reserve to pay legal costs related to the LaSalle dispute.

Sources: Reuters, Forbes, Bloomberg, Wall Street Journal
Commentary: RBS Consortium Formalizes Bid for ABN • ABN Amro Opposes RBS-Led Rival Bid for LaSalle • ABN Shareholders Determined to Thwart LaSalle Sale to BoA; RBS-Led Consortium Reiterates Rival Bid
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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