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ABN Amroast: The Scots Get Serious & The Dutch Turn Up Their Noses

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The Royal Bank of Scotland got serious in its attempt to awkwardly cut in on the marriage dance of ABN Amro and Barclays Bank today, submitting a $96.4 billion hostile unsolicited takeover offer today and a $24.5 billion offer for LaSalle, its Chicago-based banking unit. And ABN remained adamant in its refusal to take RBS for a swing across the dance floor.
The RBS offers top the deals ABN already has in the works to sell LaSalle to the Bank of America for $21 billion and everything else to Barclays for $87.1 billion. ABN said it would submit both offers to shareholders without endorsing them—in other words, it rejected RBS’s advances. Although the offers were higher, it said that the conditions attached to both offers and uncertainty about financing rendered both “not superior” to the Barclays and Bank of America bids.

The deal has been locked in controversy—and now litigation—since RBS emerged as a rival bidder to Barclays. The management of ABN is widely seen as favoring the sale to Barclays, and the deal to sell LaSalle to Bank of America has been described as a “poison pill” meant to prevent RBS from successfully acquiring the Dutch bank. Indeed, when Bank of America sued ABN in US federal court on Friday for breaching their deal, there was speculation that ABN would welcome the lawsuit as a way to hold-off RBS. Bank of America’s lawsuit asks the court to ban ABN from even talking to “other bidders”—namely, RBS—about alternate deals.
That lawsuit came after a Dutch court issued a ruling blocking the LaSalle sale to Bank of America. The Dutch accused ABN's board of misunderstanding its duties to shareholders, and of trying to present the Barclay’s deal as a fait accompli.
So why is the ABN board so solicitous of being taken-over by Barclays and obviously opposed to Royal Bank of Scotland. To hear the board tell the tale, you’d think it was all a matter of timing—it keeps saying that it favors Barclay’s because it already has a deal in place. RBS has simply come late to the altar. But it may also have something to do with the different plans the bidders have for the Dutch bank. “ABN's management has failed to hide its preference for a deal with Barclays, which would see ABN stay intact and its headquarters in Amsterdam, while the RBS consortium plans to carve up the bank into three parts,” Forbes' Parmy Olson writes.
The deal also faces trouble from labor unions and some Dutch politicians, according to the Associated Press. Regardless of the buyer, the sale of ABN will likely lead to job losses in the Netherlands and England, although the RBS bid is seen as probably leading to more job losses in the Netherlands than the Barclays bid.
Shares of ABN traded down today, and many suspect that the board's rough treatment of RBS's may have been the culprit. Forbes' Pamry writes that " there are fears that ABN's latest snub of RBS may well have pushed the higher-paying consortium away."
ABN Amro gets hostile $96B bid from RBS [Associated Press in Business Week]
ABN Snubs RBS Proposal For LaSalle [Forbes]
ABN Amro Rejects Royal Bank-Led Offer for LaSalle [Bloomberg]