ABN Amro shares dropped 1.4% to €35.77 in Amsterdam after a rival consortium canceled a meeting today with the Dutch bank to discuss a takeover. The consortium, which consists of the Royal Bank of Scotland [RBS], Banco Santander Central Hispano and Fortis NV, is reviewing its options after ABN's announcement that it is selling Chicago-based LaSalle Bank to Bank of America for $21 billion as part of a $91 billion merger with Barclays. "The banks need to understand the circumstances under which [the LaSalle] sale can be terminated,'' the consortium said. RBS had planned to acquire LaSalle as part of an overall acquisition of ABN and then merge it with its U.S. Citizens division, giving it cost savings and revenue benefits. The consortium has made clear its intention to break up the Dutch bank, a denouement favored by activist shareholder TCI Fund Management. TCI is "concerned the pre-agreed sale of LaSalle Bank unfairly hinders the RBS consortium," and is demanding disclosure of the terms of the sale. The Dutch shareholders' association VEB has stated it will take ABN Amro to court for selling LaSalle without a shareholder vote if it the sale deters rival bidders for ABN.
Sources: Wall Street Journal, MarketWatch, Financial Times, Bloomberg
Commentary: Barclays offer for ABN probably will win the day [MarketWatch] • 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 (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 (NASDAQ:PID), iShares MSCI Netherlands Index (NYSEARCA:EWN)
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