Absa parent bank steals march on rivals as Dutch group snubs RBS
LaSalle is at the centre of a struggle for control of the largest Dutch bank, and the latest rejection may leave Barclays as the bidder preferred by ABN.
Barclays holds a controlling stake in SA’s biggest lender, Absa. Absa CEO Steve Booysen said recently a tie-up between Barclays and ABN Amro would boost Absa’s global reach.
Barclays and ABN are planning a $91bn merger, but RBS hopes to trump this as the biggest takeover battle in the financial services industry intensifies.
The RBS consortium, which also includes Spain’s Santander and Belgian-Dutch bank Fortis, has said it would be willing to offer $96,4bn for ABN but this offer is conditional on it gaining control of LaSalle.
The takeover battle for the Netherlands’ biggest bank has become mired in legal wrangling.
The view of ABN’s managing board is that the acquisition proposal for LaSalle by the RBS consortium did not constitute a superior proposal.
A court in the Netherlands last week blocked ABN’s plan to sell LaSalle to Bank of America for $21bn, potentially opening the way for RBS.
The sell-off of LaSalle is a key factor in ABN’s planned merger with Barclays.
The RBS consortium, meanwhile, has said the acquisition of LaSalle is a key component of its overall offer for ABN.
ABN said RBS’ position that its bid for the entire company was conditional on the LaSalle deal going ahead was unacceptable.
“The considered view of the managing board is that the acquisition proposal for LaSalle did not constitute a superior proposal as a result of the uncertainty and execution risks,” the Dutch bank said. It had not received any evidence of how the RBS group proposed to fund its proposed acquisition of ABN, despite repeated requests.
The breakdown in talks and the announcement of pricing indicates that RBS may make a public offer for ABN, bypassing the need for a shareholder meeting.
After giving the seven-day notice required under Dutch regulations, RBS can make a public tender offer for ABN.
RBS also succeeded in getting ABN to remove a standstill position in a due-diligence contract it signed last week in order gain access to ABN’s books, which would have prevented the con- sortium from making a public offer for ABN.
ABN said yesterday the rival LaSalle bids would now be decided upon by ABN shareholders at an upcoming extraordinary general meeting.
“At this stage, the most likely outcome seems to be that shareholders will have the final say and that price will win out,” Simon Willis, analyst at NCB Stockbrokers, said in a note.
In a statement, the RBS consortium said its offer for LaSalle was higher than its rival’s offer.
“The banks considered their proposal to be superior under the terms of the contract between ABN Amro and Bank of America,” it said.
Last week’s decision by a Dutch court that ABN could not go ahead with the sale of LaSalle to Bank of America without first putting the decision to a vote by shareholders threw the whole takeover battle into confusion.
The RBS consortium eventually plans to break up ABN if it wins control of the Dutch bank, while Barclays has pledged to shift the enlarged group’s head- quarters to Amsterdam if its bid is successful. The ABN sale was sparked by a Children’s Investment Fund campaign to get the bank to break itself up to maximise shareholder value.
