ABN Amro was on Sunday weighing the merits of a $24.5bn offer for its US subsidiary, LaSalle, from a consortium led by Royal Bank of Scotland as part of a proposed €71bn break-up bid for the Dutch lender.
The consortium’s bid for LaSalle, submitted on Saturday, is significantly higher than the $21bn offer ABN Amro has already agreed with Bank of America, conceived as a prelude to a sale of the rest of ABN to Barclays. However, the price is conditional on the consortium succeeding with its plan to buy the whole of ABN Amro.
The consortium, which includes Santander of Spain and Fortis, the Belgo-Dutch group, was on Sunday continuing to work with ABN Amro to clarify its proposed takeover bid, which values the bank at €38.40 per share.
People familiar with the talks said the consortium’s plans left several important questions unanswered, such as how it would raise the €27 a share in cash it is planning to include in its offer for ABN Amro, and how this would be divided between the three banks.
However, those people also stressed the talks were fluid and the situation could change. Under the terms of its agreement with BofA, ABN Amro had until midnight, New York time, on Sunday to accept a higher offer for LaSalle. BofA then has five days to match the bid.
The LaSalle sale process has been thrown into confusion after a Dutch commercial court ruled on Thursday that the deal must be put to ABN Amro shareholders. The ruling prompted BofA to file a lawsuit against ABN Amro in New York, claiming it would suffer billions of dollars in damages if the LaSalle deal did not go ahead.
The consortium is planning to create a bid vehicle that would buy ABN Amro and then divide its assets among the three banks. The cash component would be partially funded with rights issues by Fortis and Santander in the fourth quarter of the year. Merrill Lynch, the investment bank advising the consortium, is understood to have committed to underwrite the entire bid.
However, the consortium has so far failed to clarify on what terms these rights issues would be carried out or how much cash they would raise. It also remains unclear how the ownership of the bid vehicle will be structured, or whether the Dutch central bank will accept such a proposal.
ABN Amro’s management and supervisory boards must rule whether the consortium’s offer for LaSalle is superior to BofA’s bid. Lawyers disagree on whether ABN Amro is allowed to accept a conditional offer, and any decision to do so may draw further legal challenges from BofA.
The consortium had also been planning to make its offer for ABN Amro conditional on there not being any outstanding legal actions against the bank. But it is now understood to have dropped that condition.
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