Judge blocks ABN’s plan to sell LaSalle/BofA sues ABN over LaSalle deal/ABN Amro calls a halt to LaSalle offers
ABN Amro calls a halt to LaSalle offers
By Peter Thal Larsen in London, Ian Bickerton in Amsterdam and Ben White in New York
Copyright The Financial Times Limited 2007
Published: May 4 2007 22:15 | Last updated: May 5 2007 00:00
ABN Amro on Friday night called a halt to any new offers for its US subsidiary, LaSalle, after a Dutch court refused to clarify a ruling that freezes the sale of the business to Bank of America for $21bn.
The Dutch bank’s decision created further uncertainty about the status of talks over a €72bn ($98bn) takeover bid by a consortium of European banks led by Royal Bank of Scotland.
Earlier in the day, BofA filed a lawsuit in New York claiming ABN Amro had breached its contract by halting the sale of LaSalle.
Sir Fred Goodwin, chief executive of RBS, Maurice Lippens, chairman of Fortis and a senior executive of Santander, the Spanish banking group, last night flew to Amsterdam to present their case to Rijkman Groenink, ABN Amro chief executive and Arthur Martinez, chairman of the bank’s supervisory board.
The first face-to-face meeting between the consortium and ABN Amro came as bankers and lawyers grappled with the consequences of the Dutch court’s decision on Thursday to halt the sale of LaSalle, ABN Amro’s US subsidiary, to BofA.
BofA’s complaint said if it fails to acquire LaSalle the “resulting injury...is not compensable in money damages”. It also said BofA stands to sustain billions in losses in the dispute. The BofA lawsuit is the first salvo in what could be a protracted battle over the LaSalle sale and, thus, the whole of ABN Amro.
The RBS-led consortium had been expected to submit a rival bid for LaSalle conditional on its offer for the whole of ABN Amro succeeding. But BofA’s lawsuit indicated that it would not accept a conditional bid for LaSalle as valid.
The Dutch court’s ruling has also raised questions about the position of Mr Groenink, who negotiated the sale of LaSalle and has argued against a break-up of the bank, preferring an agreed takeover by Barclays, the UK group.
ABN Amro on Friday publicly continued to stand by Mr Groenink, while people close to the bank said removing him would only add to the uncertainty at the bank.
BofA said that in its agreement to sell LaSalle, ABN gave assurances that it had the legal authority to transfer the asset without a shareholder vote.
Judge blocks ABN’s plan to sell LaSalle
By Peter Thal Larsen in London and Ian Bickerton in Amsterdam
Copyright The Financial Times Limited 2007
Published: May 3 2007 16:21 | Last updated: May 3 2007 16:21
The battle for control of ABN Amro was thrown into confusion on Thursday when a commercial court in Amsterdam blocked the Dutch bank’s plans to sell LaSalle, its US subsidiary, to Bank of America for $21bn.
The decision, prompted by a petition by VEB, a Dutch shareholder group, represents a victory for investors who want to force ABN Amro to consider a break-up bid from a consortium led by Royal Bank of Scotland. It also represents a severe blow to Barclays’ ambitions to complete its agreed takeover of the Dutch bank.
However, the ruling by judge Huub Willems takes the cross-border takeover battle into unchartered waters and could trigger further legal action in several other countries. Lawyers for BofA warned last weekend that the world’s second-largest bank would “be compelled” to file a claim for damages against ABN Amro if the court delayed the LaSalle deal.
Barclays may also have grounds for legal action against ABN Amro for breaching the terms of its takeover agreement, which is dependent on the sale of LaSalle.
In a long-awaited ruling, the court said that while it was the decision of ABN Amro’s management to sell LaSalle, the deal should be put to shareholders.
ABN Amro had argued that its statutes did not require it to put the sale to a shareholder vote because LaSalle did not constitute a sufficiently large proportion of its assets. BofA had also argued that it would never have agreed to buy LaSalle on the current terms if it realised the deal required approval from ABN Amro shareholders.
The decision represents a triumph for shareholders, who have been pressing ABN Amro to consider higher offers for the bank, over its management, which has been resisting a break-up bid on the grounds that it would not be in the best interests of the bank or its stakeholders.
However, the ruling also seems certain to extend the uncertainty about ABN Amro’s future, unsettling employees and raising concerns among regulators eager to maintain the stability of the financial system.
At a hearing last Saturday Rijkman Groenink, ABN Amro’s chief executive, told the court that the bank had become a “toy for hedge funds”.
BofA sues ABN over LaSalle deal
By Ben White in New York
Copyright The Financial Times Limited 2007
Published: May 4 2007 16:35 | Last updated: May 4 2007 16:35
Bank of America on Friday filed a suit in New York against ABN Amro, alleging that the Dutch bank violated the terms of its agreement to sell its Chicago-based LaSalle unit to BofA for $21bn.
BofA demanded in the suit that ABN be barred from negotiating to sell LaSalle to a third party and be ordered to sell the bank to BofA under terms of the initial agreement.
The complaint does not specify potential monetary damages and says if BofA fails to acquire LaSalle, the “resulting injury ... is not compensable in money damages.” However, the complaint also says BofA stands to sustain billions of dollars of losses in the dispute over LaSalle and asks for money damages to be awarded at trial.
BofA said that in its agreement to sell LaSalle, ABN gave assurances that it had the authority to transfer the asset without a shareholder vote. However, a commercial court in Amsterdam on Thursday blocked the LaSalle sale, saying it must be put to a vote of ABN shareholders.
The ruling was a victory for shareholders who had challenged the sale because it undermined a bid for ABN Amro by a trio of European banks led by Royal Bank of Scotland. ABN already has an agreed bid to sell itself to Barclays of the UK, but that deal is contingent on the transfer of LaSalle to BofA. The trio led by RBS wants to buy all of ABN and split in into parts.
In the lawsuit, BofA said it “has suffered substantial harm as a result of ABN Bank’s breaches of its representations and warranties. The opportunity to acquire LaSalle represents a unique and irreplaceable business opportunity and the loss of that opportunity would cause irreparable damage to Bank of America. The LaSalle transaction is critical to Bank of America’s long term strategy to expand into the Chicago market.”
BofA added, “LaSalle is one of only two potential acquisition targets that could give Bank of America a meaningful presence in that market and the other bank is not for sale. The alternative ― expanding into the Chicago market through internal growth ― would take years and would be extremely costly.”
BofA said the US court has jurisdiction because ABN agreed to make US federal courts the sole forum to resolve any disputes over the LaSalle sale.
By Peter Thal Larsen in London, Ian Bickerton in Amsterdam and Ben White in New York
Copyright The Financial Times Limited 2007
Published: May 4 2007 22:15 | Last updated: May 5 2007 00:00
ABN Amro on Friday night called a halt to any new offers for its US subsidiary, LaSalle, after a Dutch court refused to clarify a ruling that freezes the sale of the business to Bank of America for $21bn.
The Dutch bank’s decision created further uncertainty about the status of talks over a €72bn ($98bn) takeover bid by a consortium of European banks led by Royal Bank of Scotland.
Earlier in the day, BofA filed a lawsuit in New York claiming ABN Amro had breached its contract by halting the sale of LaSalle.
Sir Fred Goodwin, chief executive of RBS, Maurice Lippens, chairman of Fortis and a senior executive of Santander, the Spanish banking group, last night flew to Amsterdam to present their case to Rijkman Groenink, ABN Amro chief executive and Arthur Martinez, chairman of the bank’s supervisory board.
The first face-to-face meeting between the consortium and ABN Amro came as bankers and lawyers grappled with the consequences of the Dutch court’s decision on Thursday to halt the sale of LaSalle, ABN Amro’s US subsidiary, to BofA.
BofA’s complaint said if it fails to acquire LaSalle the “resulting injury...is not compensable in money damages”. It also said BofA stands to sustain billions in losses in the dispute. The BofA lawsuit is the first salvo in what could be a protracted battle over the LaSalle sale and, thus, the whole of ABN Amro.
The RBS-led consortium had been expected to submit a rival bid for LaSalle conditional on its offer for the whole of ABN Amro succeeding. But BofA’s lawsuit indicated that it would not accept a conditional bid for LaSalle as valid.
The Dutch court’s ruling has also raised questions about the position of Mr Groenink, who negotiated the sale of LaSalle and has argued against a break-up of the bank, preferring an agreed takeover by Barclays, the UK group.
ABN Amro on Friday publicly continued to stand by Mr Groenink, while people close to the bank said removing him would only add to the uncertainty at the bank.
BofA said that in its agreement to sell LaSalle, ABN gave assurances that it had the legal authority to transfer the asset without a shareholder vote.
Judge blocks ABN’s plan to sell LaSalle
By Peter Thal Larsen in London and Ian Bickerton in Amsterdam
Copyright The Financial Times Limited 2007
Published: May 3 2007 16:21 | Last updated: May 3 2007 16:21
The battle for control of ABN Amro was thrown into confusion on Thursday when a commercial court in Amsterdam blocked the Dutch bank’s plans to sell LaSalle, its US subsidiary, to Bank of America for $21bn.
The decision, prompted by a petition by VEB, a Dutch shareholder group, represents a victory for investors who want to force ABN Amro to consider a break-up bid from a consortium led by Royal Bank of Scotland. It also represents a severe blow to Barclays’ ambitions to complete its agreed takeover of the Dutch bank.
However, the ruling by judge Huub Willems takes the cross-border takeover battle into unchartered waters and could trigger further legal action in several other countries. Lawyers for BofA warned last weekend that the world’s second-largest bank would “be compelled” to file a claim for damages against ABN Amro if the court delayed the LaSalle deal.
Barclays may also have grounds for legal action against ABN Amro for breaching the terms of its takeover agreement, which is dependent on the sale of LaSalle.
In a long-awaited ruling, the court said that while it was the decision of ABN Amro’s management to sell LaSalle, the deal should be put to shareholders.
ABN Amro had argued that its statutes did not require it to put the sale to a shareholder vote because LaSalle did not constitute a sufficiently large proportion of its assets. BofA had also argued that it would never have agreed to buy LaSalle on the current terms if it realised the deal required approval from ABN Amro shareholders.
The decision represents a triumph for shareholders, who have been pressing ABN Amro to consider higher offers for the bank, over its management, which has been resisting a break-up bid on the grounds that it would not be in the best interests of the bank or its stakeholders.
However, the ruling also seems certain to extend the uncertainty about ABN Amro’s future, unsettling employees and raising concerns among regulators eager to maintain the stability of the financial system.
At a hearing last Saturday Rijkman Groenink, ABN Amro’s chief executive, told the court that the bank had become a “toy for hedge funds”.
BofA sues ABN over LaSalle deal
By Ben White in New York
Copyright The Financial Times Limited 2007
Published: May 4 2007 16:35 | Last updated: May 4 2007 16:35
Bank of America on Friday filed a suit in New York against ABN Amro, alleging that the Dutch bank violated the terms of its agreement to sell its Chicago-based LaSalle unit to BofA for $21bn.
BofA demanded in the suit that ABN be barred from negotiating to sell LaSalle to a third party and be ordered to sell the bank to BofA under terms of the initial agreement.
The complaint does not specify potential monetary damages and says if BofA fails to acquire LaSalle, the “resulting injury ... is not compensable in money damages.” However, the complaint also says BofA stands to sustain billions of dollars of losses in the dispute over LaSalle and asks for money damages to be awarded at trial.
BofA said that in its agreement to sell LaSalle, ABN gave assurances that it had the authority to transfer the asset without a shareholder vote. However, a commercial court in Amsterdam on Thursday blocked the LaSalle sale, saying it must be put to a vote of ABN shareholders.
The ruling was a victory for shareholders who had challenged the sale because it undermined a bid for ABN Amro by a trio of European banks led by Royal Bank of Scotland. ABN already has an agreed bid to sell itself to Barclays of the UK, but that deal is contingent on the transfer of LaSalle to BofA. The trio led by RBS wants to buy all of ABN and split in into parts.
In the lawsuit, BofA said it “has suffered substantial harm as a result of ABN Bank’s breaches of its representations and warranties. The opportunity to acquire LaSalle represents a unique and irreplaceable business opportunity and the loss of that opportunity would cause irreparable damage to Bank of America. The LaSalle transaction is critical to Bank of America’s long term strategy to expand into the Chicago market.”
BofA added, “LaSalle is one of only two potential acquisition targets that could give Bank of America a meaningful presence in that market and the other bank is not for sale. The alternative ― expanding into the Chicago market through internal growth ― would take years and would be extremely costly.”
BofA said the US court has jurisdiction because ABN agreed to make US federal courts the sole forum to resolve any disputes over the LaSalle sale.
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