The consortium vying with Barclays for Dutch bank ABN Amro was close to a deal with Bank of America concerning LaSalle Bank, ABN's U.S. holding, before talks had to be halted to allow the consortium to make a formal bid for ABN, the Wall Street Journal reported Thursday. ABN agreed in April to sell LaSalle to BofA for $21 billion. A buyout by Barclays bank, to which ABN had also agreed, was linked to that sale. A Dutch court froze the LaSalle sale and ordered that it be subjected to a shareholder vote. RBS is anxious to acquire all or part of LaSalle, and its offer for ABN is contingent on the cancellation of ABN's deal with BofA. BofA has sued ABN to enforce the sale. According to the Journal, RBS and BofA discussed dividing LaSalle between them. The banks were near agreement on price and were evaluating tax considerations when talks had to be suspended so RBS could make its €71.1 billion ($95.6 billion) bid for ABN. Negotiations are expected to resume, and RBS CEO Fred Goodwin said he "hopes and expects" to reach an agreement with BofA. The deal would reportedly give RBS LaSalle's commercial business, Michigan branches, HQ building and brand name. BofA would take the 141 LaSalle retail branches based in Chicago.
Sources: Wall Street Journal, MarketWatch
Commentary: ABN Mulling RBS Consortium Bid; Supervisory Board Enters Takeover Fray • 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 (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 (NYSE: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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